Schneider Electric SA
Financial
Report
2000
Get more with the world’s Power & Control specialist
General information
about Schneider Electric SA
• Legal form:
Société Anonyme (joint-stock corporation) governed by the French Commercial Code.
• Nationality:
French.
• Head office:
43/45, boulevard Franklin Roosevelt
92500 Rueil Malmaison.
• Registered in Nanterre under no. 542 048 574.
• Business identifier code (APE):
741J.
• Date founded:
1871. The company, which was called Spie Batignolles, changed its name to Schneider SA when it
merged with Schneider SA (formerly SPEP) in 1995, and then to Schneider Electric SA in May 1999.
• Term:
Up to July 1, 2031.
• Corporate purpose (summarized):
To operate, directly or indirectly, in France and abroad, any and all businesses related to electricity,
industrial control and general contracting, as well as to carry out any and all commercial, securities,
real estate and financial transactions (Article 2 of the bylaws).
• Fiscal year:
January 1 to December 31.
• Capital stock:
The Company’s capital at December 31, 2000 amounted to €1,246,301,144 represented by
155,787,643 shares with a par value of €8.00 each.
• Total number of voting rights:
165,221,916 (information published in the BALO legal gazette on May 17, 2000).
• The bylaws, minutes of Annual Meetings, Auditors’ Reports and other legal documents concerning
the Company are available for consultation at the Company’s head office (Investor Relations
department) located at 43/45 boulevard Franklin Roosevelt – 92500 Rueil Malmaison, France.
44
2000 Financial Report
Contents
General Presentation of Schneider Electric SA .................................................................................................... 46
Background ................................................................................................................................................................................................ 46
Current Business .................................................................................................................................................................................. 46
Capital ............................................................................................................................................................................................................ 47
Ownership Structure ........................................................................................................................................................................ 50
Employee Profit Sharing, Stock Ownership and Stock Option Plans .................................................. 50
Stock Buybacks ...................................................................................................................................................................................... 52
Stock Market Data .............................................................................................................................................................................. 52
Investor Relations .................................................................................................................................................................................. 54
Corporate Governance .................................................................................................................................................................... 54
Claims, Litigation and Other Exceptional Events .................................................................................................. 58
Auditors .......................................................................................................................................................................................................... 58
Shareholders’ Rights and Obligations ................................................................................................................................ 58
Business Review .......................................................................................................................................................................................... 60
Consolidated Financial Statements ...................................................................................................................................... 66
Consolidated Statement of Income ........................................................................................................................................ 66
Consolidated Statement of Cash Flows ............................................................................................................................ 67
Consolidated Balance Sheet ........................................................................................................................................................ 68
Consolidated Statement of Changes in Shareholders’ Equity ...................................................................... 70
Notes to the Consolidated Financial Statements .................................................................................................... 71
Summary Financial Statements of Schneider Electric SA ........................................................................ 93
Subsidiaries and Affiliates ............................................................................................................................................................ 94
Five-Year Financial Summary .................................................................................................................................................. 96
Auditors’ Report on the Consolidated Financial Statements .................................................................. 97
Report from the Board of Directors
................................................................................................................................
100
Auditor’s Report on the issuing of other investment securities ........................................................ 105
Resolutions .................................................................................................................................................................................................... 106
General Presentation of Schneider Electric SA
45
General Presentation of Schneider Electric SA
General Presentation
of Schneider Electric SA
Background
Industrial background
Schneider Electric SA is a Société Anonyme (jointstock corporation) incorporated in France on
December 2 and 4, 1871. However, the Company
traces its history back to 1836, when Adolphe and
Joseph-Eugène Schneider acquired steel foundries
in Le Creusot, France that were experiencing financial difficulties. In 1838, they formed Schneider &
Cie.
From that point until the mid-twentieth century,
the Company steadily built a presence in heavy
mechanical engineering and transportation equipment, with interests in shipbuilding, railroad
equipment and bridge and tunnel building. By the
end of the nineteenth century, Schneider had also
established a position in electricity.
Gradually, however, the Company grew into a
huge conglomerate that lacked strategic direction.
From 1981 to 1997, it refocused on electricity
and pulled out of a number of businesses, including steel, machine tools, shipbuilding, railways,
private telephone systems and engineering. At the
same time, it pursued a strategy of acquisitions in
electricity, bringing in Telemecanique in 1988
and Square D in 1991. The refocusing process
was completed in 1997 with the sale of Spie
Batignolles.
In 1999, the Company acquired Lexel A/S,
Europe’s second largest supplier of low-voltage
final distribution products and systems, with operations primarily in Northern Europe.
Schneider Electric is now specialized in the
manufacture and sale of products and equipment
for electrical distribution, industrial control and
automation, with 72,200 employees and operations in 130 countries around the world.
Ownership background
By 1981, the Company’s ownership structure
consisted of a long chain of holding companies,
interlocked via numerous cross-shareholdings,
that separated the parent company, SPEP, from
its operating subsidiaries. This system had been
set up over the preceding decade.
46
Over the next fourteen years, the ownership
structure was rationalized by merging the various
holding companies to create a single parent company, Schneider SA. In 1999, the Company changed its name to Schneider Electric SA, which
owns all outstanding shares of Schneider Electric
Industries SA.
Current business
Schneider Electric is present at all stages in the
power generation, transmission and distribution
process, with specialist skills in high and medium
voltage equipment, final low voltage and consumer final low voltage equipment, industrial
control and programmable logic controllers. The
Company manufactures electrical switchgear and
equipment under the Merlin Gerin, Modicon,
Square D and Telemecanique and Lexel brand
names.
The Company is not dependent on any single
patent, license or supply contract. It ranks first
worldwide in areas representing around 60% of its
sales and second and third in areas representing
around 20%. The competition breaks down into
two categories:
- Very large non-specialist manufacturers with
diversified business bases that offer little synergy.
These include ABB, General Electric, Mitsubishi
Electric and Siemens.
Smaller specialist manufacturers, such as Alstom,
Eaton, Hager and Legrand in electrical distribution and Omron and Rockwell in industrial
control and automation.
- Smaller specialist manufacturers, such as
Alstom, Eaton, Hager and Legrand in electrical
distribution and Omron and Rockwell in industrial control and automation.
Already the largest player in this second category,
Schneider Electric made a public offer to purchase
Legrand in exchange for shares in January 2001.
Three-year financial summary
Investments
Total investments
Of which gross capital spending
Research and development expenditure
Average number of employees for the year
2000
1999
1998
(€ bn)
(FF bn)
1.22
8.0
0.50
3.3
0.47
3.1
72,200
(€ bn)
(FF bn)
1.54
10.1
0.44
2.9
0.44
2.9
67,500
(FF bn)
3.1
2.5
2.6
60,800
(€ bn)
6.9
2.8
–
(€ bn)
5.9
2.5
–
(FF bn)
39.0
16.0
–
(FF bn)
33.5
15.9
0.6
55.0
50.0
(FF bn)
9.7
19.0
16.9
2.0
4.4
3.0
–
(FF bn)
9.8
15.2
15.0
1.9
3.4
3.9
0.8
55.0
50.0
Consolidated sales
Growth by business segment
Electrical distribution
Industrial control and automation
Other and eliminations
9.7
Sales by region
France
Western Europe
North America
Middle East
Asia
Africa and Latin America
Rest of world
63.6
(€ bn)
1.5
3.2
3.2
0.4
0.8
0.6
–
9.7
(FF bn)
45.3
18.3
–
(FF bn)
9.9
20.8
21.3
2.3
5.6
3.7
–
63.6
8.4
(€ bn)
1.5
2.9
2.6
0.3
0.7
0.4
–
8.4
Capital
Capital stock and voting rights
The Company’s capital stock at December 31, 2000
amounted to €1,246,301,144, represented by
155,787,643 shares with a par value of €8.00, all
fully paid up. As of May 5, 2000, a total of
165,221,916 voting rights were attached to the
155,787,643 shares outstanding (information
published in the “BALO” legal gazette dated
May 17, 2000).
Changes in capital stock
The following table shows changes in Schneider
Electric SA’s capital stock and additional paid-in
capital over the past five years, through the exercise
of warrants and stock options, the conversion of
bonds, the issuance of shares to the Employee Stock
Ownership Plan, the payment of stock dividends, the
June 1997 merger of Telemecanique into Schneider
SA, and the May 5, 2000 cancellation of shares.
General Presentation of Schneider Electric SA
47
General Presentation of Schneider Electric SA
Five-Year Summary of Changes in Capital
Number of shares
issued or cancelled
Capital at December 31, 1995
(1)
Conversion of bonds
Conversion of Square D bonds
Exercise of warrants
Exercise of stock options
Payment of a stock dividend
Shares issued to the ESOP
Capital at December 31, 1996
(2)
1,013,570,142
or 6,648,584,300
euros
francs
136,922,169
1,043,682,505
or 6,846,108,450
euros
francs
152,168,097
1,159,893,842
or 7,608,404,850
euros
francs
153,417,118
1,169,414,443
or 7,670,855,900
euros
francs
161,423,578
1,291,388,624
or 8,071,178,900
euros
francs
155,787,643
1,246,301,144
soit 8,175,199,595
euros
francs
759,848
247,273
241,900
(4)
Conversion of bonds
Conversion of Square D bonds
Exercise of stock options
Shares issued to the ESOP
3,495,796
2,272,282
704,300
1,534,082
Capital at December 31, 1999*
(5)
Cancellation of shares
Conversion of Square D bonds
Exercise of options
Capital at December 31, 2000
132,971,686
2,615,808
1,220,770
8,562,022
56,740
117,840
2,672,748
(3)
Conversion of bonds
Conversion of Square D bonds
Exercise of stock options
Capital at December 31, 1998
New capital
67,021
567,894
12,794
308,360
1,744,414
1,250,000
Conversion of bonds
Conversion of Square D bonds
Exercise of warrants
Exercise of stock options
Schneider SA/Telemecanique merger
Shares issued to the ESOP
Capital at December 31, 1997
Total shares
outstanding
(6,000,000)
152,275
211,790
(6)
* The Company’s capital stock was converted into euros on January 14, 2000. The FF 399.8 million difference arising on conversion was charged against additional paid-in capital.
(1) €43.35 million increase in capital stock,
€90.75 million increase in additional paid-in capital.
(2) €30.11 million increase in capital stock,
€82.33 million increase in additional paid-in capital.
(3) €116.21 million increase in capital stock, €320.82 million increase in additional paid-in capital
(4)€9.52 million increase in capital stock,
€33.72 million increase in additional paid-in capital.
(5) €121.97 million increase in capital stock, €252.72 million increase in additional paid-in capital
(6) €45.09 million decrease in capital stock, €284.87 million decrease in additional paid–in-capital.
48
Potential capital
Share Equivalents Outstanding at December 31, 2000 (excluding stock options)
Security
Redemption
date
Rate
%
Securities
outstanding
Conversion
parity
Potential
shares
created
Square D
November 1992
convertible bonds Jan. 2, 2003
2
820
232,84
190,931
Conversion
price
($)
(1)
($)10,000
(1) At maturity in 2003. The redemption value increases over time, through capitalization of the difference between the 7% internal rate of return and the 2% interest rate paid.
There are no other share equivalents outstanding.
Authorizations to issue shares
At the Combined Annual and Extraordinary
Shareholders’ Meeting of May 6, 1999, the Board
of Directors was authorized to issue new shares
under the provisions of article L 225-129 III of
the French Commercial Code, and to grant
options to purchase new or existing shares in the
Company.
At the Combined Annual and Extraordinary
Shareholders’ Meeting of May 5, 2000, the Board
of Directors was authorized to issue new shares to
Group employees who are members of the
Employee Stock Ownership Plan. The number of
shares issued may not exceed 5% of the Company’s
capital stock over a period of five years.
The authorizations currently in force are as follows:
Maximum aggregate
par value of shares
that may be issued
Authorization
date
Authorization
expires
Amount
used
I - Issues with pre-emptive subscription rights
Shares, warrants and other securities convertible,
exchangeable, redeemable or otherwise
exercisable for shares
€750 million (1) (2)
May 6, 1999
July 6, 2001
–
II - Issues without pre-emptive subscription rights
Shares, warrants and other securities convertible,
exchangeable, redeemable or otherwise
exercisable for shares, including shares issued
in connection with a tender offer initiated by
the Company
€ 750 million (1) (2)
May 6, 1999
5% of the capital
5% of the capital
May 5, 2000
May 6, 1999
III - Employee share issues
Share issues restricted to employees
(Government order of 1986)
Options to purchase new shares
July 6, 2001 €703 million (3)
May 5, 2005
May 6, 2004
–
–
(1) The ceilings of €750 million for issues with and without pre-emptive subscription rights are not cumulative.
(2) At the Annual Shareholders’ Meeting of June 11, 2001, shareholders will be asked to renew this authorization, subject to a limit of €750 million in the maximum par value of
shares to be issued.
(3) On January 12, 2001, the Board of Directors approved the issue of new shares to be exchanged for Legrand shares tendered to Schneider Electric SA’s public offer. The amount used
(€703 million) assumes that 100% of outstanding Legrand shares will be tendered to the offer.
General Presentation of Schneider Electric SA
49
General Presentation of Schneider Electric SA
Ownership structure
Dec. 31, 2000
Interest
Voting rights
%
Number of
voting rights
Dec. 31, 1999
Interest
Voting
%
rights
%
Dec. 31, 1998
Interest
Voting
%
rights
%
%
Number
of shares
AGF
Axa
BNP-Paribas
1.52
5.53
2.94
2,371,368
8,611,381
4,574,400
2.81
9.51
5.38
4,667,490
15,806,269
8,939,171
1.99
6.24
2.79
3.59
10.55
5.37
2.77
6.57
2.85
4.37
10.64
5.38
Groupe
Société Générale
0.56
874,976
0.76
1,267,100
1.91
2.12
1.70
2.37
6.28
4.51
1.38
5.00
72.28
9,780,782
7,023,412
2,150,352
7,793,128
112,607,844
5.88
7.57
–
–
68.09
9,780,783
12,584,928
–
–
113,188,411
4.61
4.50
1.34
7.15
69.47
4.54
5.98
–
–
67.85
4.85
4.18
1.36
3.46
72.26
4.58
4.79
–
–
67.87
100.00
155,787,643
100.00
166,234,152
100.00
100.00
100.00
100.00
Groupe Caisse des dépôts
et consignations
Employees
Treasury stock (1)
Intragroup cross shareholdings
Public
Total
(1) Primarily via Cofibel.
Ownership structure at December 31, 2000
Historical shareholders
Treasury stock - Intragroup
cross shareholdings
Employees
Public (France)
Public (International)
■
■
■
■
■
6.38%
4.51%
44.80%
33.76%
As of December 31, 2000, Schneider Electric had
approximately 120,000 shareholders (based on
Euroclear data).
Disclosure thresholds
To the best of the Company’s knowledge, no
shareholders other than those listed above and
Janus Capital Corporation, an American mutual
fund manager, own, either directly or indirectly,
more than 5% of Schneider Electric’s capital.
Shareholders’ pact
Under the terms of the shareholders’ pact signed on
September 16, 1993 by Axa, AGF, Comipar,
Compagnie Financière de Paribas, Elf, Euris and
Société Générale (Société des Bourses Françaises
notice no. 93-3184 dated November 15, 1993), as
amended on October 19, 1995 (Société des Bourses
Françaises notice no. 95-3069 dated October 27, 1995),
the signatories of the pact gave each other preemptive rights to acquire their respective shareholdings. On September 16, 2000, the pact was
tacitly renewed for a further two-year period by three
of the signatories, AGF, Axa and BNP-Paribas. The
other signatories had either withdrawn from the pact
or sold their Schneider Electric SA shares.
The interests in Schneider Electric SA’s capital
held by the current members of the pact, over
which the other signatories have pre-emptive
rights, were as follows at December 31, 2000:
50
% interest
% voting
rights
AGF
0.7
1.3
Axa
4.6
8.7
BNP-Paribas
2.1
3.9
7.4
13.9
10.55%
Total
EMPLOYEE PROFIT-SHARING, STOCK
OWNERSHIP AND STOCK OPTION PLANS
Profit-sharing plans
Profit-sharing and other profit-based incentive
plans have been in effect at Schneider Electric
Industries SA since 1994. €32.6 million was allocated under these plans in 1996, €32.6 million in
1997, €27.3 million in 1998, €24.8 million in
1999 and €39.9 million in 2000.
The “Schneider Electric”
corporate mutual fund
Schneider Electric has long been committed to developing employee stock ownership. Employees who
are members of the Employee Stock Ownership Plan
have an opportunity to purchase new or existing
Schneider Electric SA shares through corporate
mutual funds. The latest employee share issue took
place in 1999 and was open to employees in 46
countries.
As of December 31, 2000, employees held a total
of 7,023,412 Schneider Electric SA shares
through the corporate mutual funds, representing
4.5% of the capital and 7.6% of the voting rights.
Stock option plans
Grant policy
Stock option plans are approved by the Board of
Directors following a review of the plans by the
Remunerations and Appointments Committee.
A new plan, number 18, was approved in 2000.
It is a results-based plan whose options are exercisable for existing shares in the Company purchased for this purpose. A total of 1,421,200
options were granted to 1,038 people, a considerably higher number than in the past. The grantees include members of senior management
worldwide, high potential executives and
employees who performed exceptionally well in
1999. The number of options granted to a given
grantee depended on his or her position within
the organization and his or her personal perform-
ance. One half of the options granted may be
exercised provided that cumulative value creation
targets for the period 2000, 2001 and 2002 are
met. The options are not exercisable at a discount
to the average Schneider Electric SA share price
prior to the date of grant of the options by the
Board of Directors. The options have an eightyear life and may be exercised as from the third
or fifth year, depending on the grant.
Persons concerned
The following information concerns stock options
granted to employees and corporate officers,
including members of the Executive Committee.
Outstanding options
(at December 31, 2000)
Date of
Shareholders’ Meeting
Date of Board Meeting
Number
of grantees
Number of shares that
may be subscribed
Of which by the executive
team in place at the time
of grant
Number of shares that remain
to be subscribed
Of which by the current
Executive Committee
Starting date of
exercise period
Exercise price (in euros)
No. of shares subscribed
at Dec. 31, 2000
Plan 7
Plan SB
Plan 8
Plan 9
Plan 10
Plan 11
Plan 12
Plan 13
Plan 14* Plan 15*
Plan 16* Plan 17* Plan 18*
02.03.88
10.07.92
06.26.90
12.21.92
06.29.93
10.01.93
06.29.93
04.07.95
06.29.93
04.07.95
06.27.95
06.13.96
06.27.95
01.24.97
06.27.95
06.10.97
06.27.95
01.28.98
06.27.95
12.22.98
06.27.95
04.01.99
6
16
84
47
138
232
54
272
287
1
337
78,000
29,500
965,600
560,920
328,360
505,400 1,355,000
706,700 1,026,200
60,000
60,000
–
516,000
513,400
121,600
148,100 1,103,000
238,500
60,000
0
0
55,700
501,300
219,830
495,900 1,295,000
693,900 1,026,200
–
–
10,000
11,600
20,740
33,400
111,000
46,600
62,900
60,000
251,000
523,500 277,750
10.07.92
20.35
12.22.92
39.64
10.01.95
27.44
04.07.98
24.92
04.07.00
24.92
06.13.01
35.37
01.24.02
35.67
06.10.02
44.52
01.28.03
50.76
12.22.03
50.86
04.01.04
50.73
04.01.04 03.24.05
50.73
65.88
78,000
29,500
909,900
59,620
108,530
9,500
60,000
12,800
0
0
0
468,000
06.27.95 05.06.99
04.01.99 03.24.00
542
1,038
1,257,800 2,123,100 1,421,200
236,000
540,000 277,750
60,000 1,257,800 2,123,100 1,421,200
0
0
* Plans 14 through 18 concern options to purchase existing shares
The exercise periods were changed by the Board of Directors on March 25, 1997 and December 8, 1999. All
options are now exercisable after five years and within eight years of the date of grant. As from plan 11, the
options vest only if earnings or value creation targets are met. Out of the 9,149,930 options outstanding,
1,408,490 were granted to members of the Executive Committee.
General Presentation of Schneider Electric SA
51
General Presentation of Schneider Electric SA
Stock buybacks
To limit the dilutive impact of the 1999 bond
conversions and employee share issue, which led to
the issuance of eight million new shares, the
Combined Annual and Extraordinary Shareholders’
Meeting of May 5, 2000 authorized the cancellation
of six million shares purchased under previous shareholder-approved authorizations.
At the May 5, 2000 Meeting, shareholders also
authorized the Board of Directors to cancel shares
representing up to 10% of the Company’s capital,
including the six million shares referred to above,
and to continue buying back shares on the open
market.
In 2000, the Company purchased 2,371,498 shares
at an average unit price of €70.62 and sold 121,000
shares. The related transaction costs amounted to
€418,605. At December 31, 2000, the Company
held 7,793,128 of its own shares in treasury.
Stock market data
The Schneider Electric SA share is listed on the Euronext First Market in Paris, where it is traded in
lots of one under Euroclear code 12197. It is part of the market’s benchmark CAC 40 index of France’s
largest stocks.
18-Month Trading Data
Year
1999
2000
2001
Euronext Source.
52
Month
Trading volume
(in thousands
of shares)
Value
(in millions
of euros)
September
October
November
Décember
January
February
March
April
May
June
July
August
September
October
November
Décember
15,481
11,692
11,275
11,718
10,830
12,542
12,107
8,125
13,653
12,050
6,564
9,188
12,698
14,459
11,451
10,078
1,051.96
801.94
762.07
794.50
821.50
863.97
798.13
562.81
1,011.79
873.07
479.11
724.81
974.98
1,015.61
833.59
780.55
Total 2000
133,745
9,739.92
January
February
39,169
14,908
2,756.00
1056.20
Price
(in euros)
High
Low
72.60
74.40
71.00
78.00
81.00
76.80
71.75
74.15
77.80
76.80
78.50
83.00
85.80
77.20
77.10
81.75
62.90
64.65
64.15
65.65
68.40
59.20
57.35
65.20
70.10
68.15
67.00
73.60
69.00
62.70
69.10
70.25
79.20
74.30
63.10
68.00
Five-Year Summary of Share-Price Performance
2000
1999
1998
1997
1996
528.64
590.42
517.23
472.89
515.82
- Millions of euros
38.50
35.31
30.09
22.67
18.54
High and low share prices (in euros)
- High
- Low
Year-end closing price (in euros)
85.80
57.35
77.70
78.00
44.40
77.95
80.65
39.10
51.68
59.15
35.67
49.82
41.22
25.34
36.57
3.1
2.58
3.34
2.98
3.13
Average daily trading volume
Euronext Paris
- Thousands of shares
Yield including tax credit (%)
Five-Year Summary of Share-Price Performance
The Schneider Electric SA share vs. the CAC 40 index
Share price performance and trading volumes
Euronext data
Price (in euros)
90
77.70
77.95
80
70
49.82
51.68
60
36.57
50
40
30
25.52
20
Dec. 29, 1995
■ Share price in euros
Dec. 29, 1996
Dec. 29, 1997
■ Schneider Electric share
Dec. 29, 1998
Dec. 29, 1999
Dec. 29, 2000
■ CAC 40 index (base: Schneider Electric share price on December 29, 1995)
General Presentation of Schneider Electric SA
53
General Presentation of Schneider Electric SA
MONEP
CORPORATE GOVERNANCE
Options on Schneider Electric SA shares have
been traded on the MONEP market since
December 20, 1996.
BOARD OF DIRECTORS (at February 28, 2001)
Ordinary bonds
On April 14, 1999, Schneider Electric SA issued
€750 million worth of 3.75% bonds due April 14, 2004.
On May 28, 1999, a further €250 million 3.75%
bond issue was carried out, also due April 14, 2004.
The second issue is treated as an extension of the first.
Both are traded on the Euronext Paris and the Luxembourg bond markets under Euroclear code 49231.
As part of the Euro Medium Term Notes program
initiated December 21, 1999, Schneider Electric SA
issued two tranches of 6.125% bonds due October 19,
2007, worth an aggregate €450 million. The first,
worth €400 million, was issued on October 9, 2000
and the second, worth €50 million, was issued on
October 10, 2000. Together they comprise 450,000
bonds with a nominal value of €1,000 each, which
are traded on the Euronext Paris and the
Luxembourg bond markets under Euroclear code
48309.
INVESTOR RELATIONS
Honorary Chairman and Director
Didier Pineau-Valencienne
First elected: 1981
Term ends: 2001(1)
70 years old.
Other major directorships and functions:
Chairman of AFEP; Vice-Chairman of Credit Suisse
First Boston; Director of CGIP, The Equitable,
Fondation de France and Sema Group plc; Member of
the Supervisory Boards of Aventis, Axa, Lagardère,
AON France and Fleury Michon.
A graduate of Hautes Etudes Commerciales (HEC),
Didier Pineau-Valencienne headed Banque Parisienne
pour l’Industrie and Carbonisation et Charbons Actifs
(CECA) before joining Rhône-Poulenc in 1974, where
he served as President of Organic Chemicals and member of the Executive Committee. He was appointed
Chairman and Chief Executive Officer of Schneider SA
in 1981 and became Honorary Chairman in 1999. He
is also Chairman of the Schneider Electric Youth
Opportunities Foundation.
Mr. Pineau-Valencienne owns 204,619 Schneider
Electric SA shares.
Chairman and Chief Executive Officer
Person responsible for information
Antoine Giscard d’Estaing
43/45, boulevard Franklin Roosevelt
92500 Rueil Malmaison, France
Tel: +33 (0)1 41 29 71 34
Contacts
Institutional investors, financial analysts and
private shareholders calling from outside
France may request information and documents from :
Sébastien Desarbres
at the Investor Relations department,
at +33 (0)1 41 29 70 42
or fax +33 (0)1 41 29 71 42.
Shareholder documents
In addition to the annual report, the following
documents are published for shareholders:
■
A Shareholder’s Guide.
■
A Shareholders’ Letter (four times a year).
General, economic and financial information
concerning the Company, available on the corporate website (www.schneider-electric.com). Press
releases are also available at www.prline.com.
■
Henri Lachmann
First elected: 1996
Term ends: 2005
62 years old.
Other major directorships and functions:
Director of CNRS, Etablissements de Dietrich &
Cie, Facom and Vivendi; Member of the Supervisory
Board of Axa.
A graduate of Hautes Etudes Commerciales (HEC),
Henri Lachmann began his career in 1963 with
Arthur Andersen. In 1970, he joined Compagnie
Industrielle et Financière de Pompey. In 1971 he
became Chief Executive Officer of Financière Strafor
(later Strafor Facom), and from 1981 to 1997 he
served as Chairman and Chief Executive Officer.
He has served as a Director of Schneider Electric SA
since 1996 and was appointed Chairman on
February 25, 1999.
Mr. Lachmann owns 10,000 Schneider Electric
SA shares.
Vice-Chairman and Chief Operating Officer
Jean-Paul Jacamon
First elected: 1998
Term ends: 2004
53 years old.
Other major directorships and functions:
Vice-Chairman and Chief Operating Officer of
Schneider Electric Industries SA.
(1) Shareholders will be asked to re-elect these directors at the 2001 Annual Meeting.
54
A graduate of Ecole Polytechnique and Ecole des
Mines, Jean-Paul Jacamon began his career at the
French Ministry of Industry and the regional landuse planning commission (DATAR). He joined
Schneider Electric in 1981, first serving as
Chairman and Chief Executive Officer of SpieTrindel and Spie-Enertrans, then as Managing
Director of Spie Batignolles in 1993. He was
appointed Executive Vice-President of the European
Division in 1995 and Vice-Chairman and Chief
Operating Officer of Schneider Electric Industries SA
in 1996. He became Vice-Chairman and Chief
Operating Officer of Schneider Electric SA in
February 1999.
Mr. Jacamon owns 5,000 Schneider Electric SA
shares.
Directors
Claude Bébéar
First elected: 1986
Term ends: 2005
65 years old, Chairman of the Supervisory Board
of Axa.
Other major directorships and functions:
Chairman and Director of a number of Groupe Axa
companies, Director of BNP-Paribas, ViceChairman of Fédération Française des Sociétés
d’Assurances, Chairman of Fondation pour le
Mécénat Humanitaire and Chairman of the Institut
du Mécénat de Solidarité.
A graduate of Ecole Polytechnique, Claude Bébéar
joined Groupe Ancienne Mutuelle—later re-named
Mutuelles Unies and then Groupe Axa—in 1958. He
was appointed Chairman and Chief Executive
Officer in 1975. From late 1996, when Axa merged
with UAP, until 2000, when he was appointed
President of the Supervisory Board, Mr. Bébéar
served as President of the Management Board and
Chairman of the Executive Committee of Groupe
Axa. He is Chairman of Schneider Electric SA’s
Remunerations and Appointments Committee.
Mr. Bébéar owns 250 Schneider Electric SA shares.
Daniel Bouton
First elected: 1995
Term ends: 2004
51 years old, Chairman and Chief Executive Officer
of Société Générale.
Other major directorships and functions:
Director of TotalFinaElf SA and member of the
Supervisory Board of Vivendi Environnement.
A graduate of Ecole Nationale d’Administration and a
Finance inspector, Daniel Bouton held several positions
within the French Finance Ministry, including Budget
Director, from 1988 to 1991. He joined Société
Générale in 1991, becoming Chief Executive Officer in
1993 and Chairman in 1997.
Mr. Bouton owns 250 Schneider Electric SA
shares.
Thierry Breton*
First elected: 2000
Term ends: 2004
46 years old, Chairman and Chief Executive Officer
of Thomson S.A. and of Thomson multimedia.
A graduate of Supelec, Thierry Breton served as
Chairman of Forma Systèmes from 1981 to 1986,
Advisor to the French Ministry of National
Education, in charge of information technology and
new technologies from 1986 to 1988, Managing
Director of the Futuroscope Teleport business park in
Poitiers from 1986 to 1990, Executive Vice President
of the CGI Group from 1990 to 1993, and Executive
Chairman of the Bull Group from 1993 to 1997. He
was appointed Chairman of Thomson S.A. and of
Thomson Multimedia in March 1997.
Mr. Breton owns 370 Schneider Electric SA
shares.
Alain Burq
First elected: 2000
Term ends: 2004
47 years old, Chairman of the Supervisory Board of
the “Schneider Actionnariat” corporate mutual fund.
A graduate of Ecole Supérieure de Commerce de
Paris, Alain Burq also has an MBA from the
Wharton School of the University of Pennsylvania.
In 1982, he joined Schneider Electric, where he has
been in charge of special projects for the Finance and
Control department since 1998.
Mr. Burq owns 250 Schneider Electric SA shares.
Jean-René Fourtou*
First elected: 1991
Term ends: 2001(1)
61 years old, Vice-Chairman of the Aventis Board of
Management.
Other major directorships and functions:
Vice-Chairman of the Supervisory Board of Axa;
Vice-Chairman of CCI; Director of La Poste,
Pernod-Ricard, Rhodia, EADS and Axa Financials.
A graduate of Ecole Polytechnique, Jean-René
Fourtou joined Bossard et Michel in 1963. He became
Chief Executive Officer of Bossard Consultants in
1977 and served as Chairman from 1977 to 1986.
Mr. Fourtou was appointed Chairman of RhônePoulenc in 1986 and Vice-Chairman of the Aventis
Management Board in 1999 following the merger
between Rhône-Poulenc and Hoechst.
Mr. Fourtou owns 2,449 Schneider Electric SA
shares.
Michel François-Poncet
First elected: 1986
Term ends: 2004
66 years old, Vice-Chairman of BNP-Paribas.
Other major directorships and functions:
Chairman of Paribas (Switzerland); Vice-Chairman
of Pargesa Holding SA (Switzerland); Director of
Eridania Beghin-Say, LVMH, TotalFinaElf SA,
Finaxa, Erbé (Belgium), and Power Corporation
* Independent non-executive director, as defined in the Viénot report on corporate governance.
(1) Shareholders will be asked to re-elect these directors at the 2001 Annual Meeting.
General Presentation of Schneider Electric SA
55
General Presentation of Schneider Electric SA
(Canada); Member of the Supervisory Board of Axa.
A graduate of Institut d’Etudes Politiques and
Harvard Business School, Michel François-Poncet
joined Banque Paribas in 1961. He became
Chairman of Compagnie Financière de Paribas in
1986 and Chairman of the Supervisory Board of
Compagnie Financière de Paribas and Banque
Paribas in 1990. From 1998 to 2000, he served as
Chairman of the Paribas Supervisory Board. In
2000, he was appointed Vice-Chairman of BNPParibas.
Mr. François-Poncet owns 300 Schneider Electric
SA shares.
Hans Friderichs*
First elected: 1997
Term ends: 2001(1)
69 years old, Corporate Director.
Other major directorships and functions:
Chairman of the Supervisory Boards of Goldman
Sachs Investment Management GmbH, Leica Camera
AG and Swatch Deutschland GmbH; Vice-Chairman
of the Supervisory Board of Adidas-Salomon AG.
Hans Friderichs, a German citizen, holds degrees in
Law and Political Science. Soon after graduating, he
joined Germany’s Free Democratic Party (FDP),
serving as Deputy Chairman from 1974 to 1977.
Mr. Friderichs was a member of parliament from
1965 to 1969, then secretary of state for the
Rhineland Palatinate Agriculture and Environment
Ministry. In 1972, he was appointed Minister of the
Economy. He left the federal government in 1997
and joined the Management Board of Dresdner
Bank AG in 1978. In 1985, he became a consultant
and corporate director.
Mr. Friderichs owns 500 Schneider Electric SA
shares.
James F. Hardymon*
First elected: 1998
Term ends: 2004
66 years old, Corporate Director.
Other major directorships and functions:
Director of Air Products & Chemicals Inc.,
American Standard Inc., Circuit City Stores Inc.,
Fleet Boston Financial Group and Lexmark
International Inc.
James F. Hardymon, a United States citizen, has
an engineering degree from the University of Kentucky.
He spent most of career at Emerson Electric Co., where
he held several positions before becoming Director
and Chief Executive Officer. In 1989, Mr. Hardymon
joined US-based Textron Inc., which has a worldclass reputation in aerospace and automation technology.
He served as Chairman and Chief Executive Officer
of Textron from January 1993 to January 1999.
Mr. Hardymon owns 797 Schneider Electric SA
shares.
Gérard de La Martinière
First elected: 1998
Term ends: 2004
57 years old, Executive Vice-President, Finance,
Budget Control and Strategy of Groupe Axa.
Other major directorships and functions:
Member of the Management Board of Axa; Managing
Director of Finaxa; Director of Crédit Lyonnais.
A graduate of Ecole Polytechnique and Ecole Nationale
d’Administration, Gérard de la Martinière held several positions at the French Finance Ministry before serving as General Secretary of Commission des
Opérations de Bourse and General Manager of Société
des Bourses Françaises. In 1989, he joined Groupe
Axa, where he was appointed Executive VicePresident, Holding Companies and Corporate
Functions in 1993 and Executive Vice-President,
Finance, Budget Control and Strategy in 2000.
Mr. de La Martinière owns 606 Schneider
Electric SA shares.
James Ross*
First elected: 1997
Term ends: 2003
62 years old, Chairman of The National Grid
Group.
Other major directorships and functions:
Chairman of The Littlewoods Organisation plc;
Director of McGraw-Hill Inc. and Datacard Inc..
James Ross, a British subject, is a graduate of Oxford.
In 1959 he joined BP, where he held several positions
before becoming a Managing Director in 1991. He served as Managing Director of Cable & Wireless plc
from 1992 to 1995.
Mr. Ross owns 300 Schneider Electric SA shares.
Piero Sierra*
First elected: 1997
Term ends: 2003
66 years old, Special Advisor for the administration
of Pirelli SpA’s international companies.
Piero Sierra, an Italian citizen with a degree in humanities from the University of Lyon, joined Milan, Italybased Pirelli SpA in 1962. He held management
positions in Italy and abroad before becoming Director
and Chief Executive Officer of Pirelli SpA from 1991
to 1995.
Mr. Sierra owns 1,000 Schneider Electric SA shares.
Organizational and operating procedures
of the Board of Directors
Six Board meetings are scheduled each year, but
in practice, the Board meets more regularly. In
2000, seven meetings were held with an attendance rate of 88%. One of the meetings was held
in the United States at a Company plant in
Raleigh, North Carolina.
* Independent non-executive director, as defined in the Viénot report on corporate governance.
(1) Shareholders will be asked to re-elect these directors at the 2001 Annual Meeting.
56
The Board has drafted internal rules governing the
operating procedures and missions of the Audit
Committee
and
the
Remunerations
and
Appointments Committee.
As recommended in the Viénot report on corporate governance, the Board of Directors of
Schneider Electric SA regularly reviews the way
that it is organized and operates, in particular
through the preparation of an annual report on its
activities. It has updated its code of ethics for
Company directors and employees, which specifically forbids insider trading.
Directors and corporate officers hold 0.15% of the
Company’s capital and 0.1% of the voting rights.
No agreements have been entered into between
the Company and its directors or officers. No
loans or guarantees have been granted to directors
or officers by the Company.
Committees of the Board of Directors
Audit Committee
In 2000, the Audit Committee comprised:
MM. David de Pury, Chairman;
Gérard de la Martinière,
Michel François-Poncet,
Didier Pineau-Valencienne,
Piero Sierra.
It is responsible for:
- Verifying that the accounting methods used to
prepare the financial statements of the Company
and the Group are appropriate and applied
consistently and that all significant transactions
are properly reflected in the consolidated financial statements.
- Reviewing the scope of the work performed by
the Auditors and the results of their audits.
- Making recommendations concerning the renewal
or appointment of the Auditors.
- Reviewing internal audit programs and the summarized reports of the internal auditors.
- Examining all financial and accounting issues
submitted to the Audit Committee by the
Chairman of the Board.
- Presenting the results of the Committee’s work,
together with recommendations concerning any
action to be taken.
In 2000, the Audit Committee met three times
under the chairmanship of David de Pury, with
an attendance rate of 80%. During these meetings, it reviewed the annual and interim financial
statements, the Company’s cash management
procedures, the internal audit process and the
impact of listing Schneider Electric SA shares on
the New York Stock Exchange. The Audit
Committee informed the Board of Directors of its
findings on February 29, September 7 and
December 6, 2000.
Remunerations and
Appointments Committee
In 2000, the Remunerations and Appointments
Committee comprised:
MM. Claude Bébéar, Chairman
Jean-René Fourtou,
Michel François-Poncet,
Henri Lachmann,
Didier Pineau-Valencienne.
The Committee is regularly informed of the
Group’s compensation policies, especially executive
compensation. It reviews stock option plans and
employee stock ownership plans decided by the
Board and makes recommendations to the Board
concerning the remuneration of corporate officers
and the appointment of directors and members of
Board Committees. It also examines succession
plans for corporate officers.
The Remunerations and Appointments Committee
met twice in 2000, with an attendance rate of 90%.
It informed the Board of Directors of its findings
on February 29, March 24, May 5 and September 7,
2000.
Executive Committee remuneration
The eleven members of the Group Executive
Committee are paid a fixed salary plus a variable
bonus representing a certain percentage of their
fixed salary. The total remuneration package of
each member is set at a competitive level compared with the remuneration paid to members of
senior management of similar industrial groups in
their respective countries. The amount of each
package is determined based on analyses and
comparisons performed by international consulting firms specialized in executive remuneration
issues.
Executive bonuses are determined based on objectives set at the beginning of the year. They can therefore vary significantly, depending on the degree to
which the objectives are met. The objectives concern
Group performance (consolidated sales) and stock
market data (earnings per share and share performance), and they also include quantitative targets
related to the entity headed by the executive concerned or qualitative targets based on personal performance. The bonuses are paid following approval of
the financial statements for the year to which they
relate.
To involve senior executives more closely in the
growth and development of Schneider Electric’s
business, their variable bonuses represent a greater proportion of their total remuneration package than is the practice among other industrial
groups. In the United States, executives benefit
both from the annual bonus and from a long-term
incentive bonus based on meeting three-year
financial objectives set for Schneider Electric
North America. The incentive bonus is paid every
General Presentation of Schneider Electric SA
57
General Presentation of Schneider Electric SA
three years, on the March 15 following the latest
cycle.
The total gross remuneration paid to members of
the Executive Committee by Group companies in
2000 amounted to €8.4 million, including fixed
salaries of €3.7 million and variable bonuses of
€4.7 million.
At the combined Annual and Extraordinary Annual
Shareholders’ Meeting of June 10, 1997, the maximum attendance fees payable to directors were set
at €411,612. The Board of Directors decided that
attendance fees would be allocated among directors
as follows:
- Each director is awarded one half of the theoretical fee per director.
- Each director who is a member of one or more
Committees of the Board of Directors is awarded
an additional one-half of the theoretical fee.
- The balance of the total attendance fees is then
shared among all the directors based on the number of Board Meetings attended during the year.
In application of these rules, attendance fees
granted for the year ended December 31, 2000
totaled €387,025.
Agreements involving directors
No agreements involving directors were entered into
during 2000 or after the close of the year (see the
Auditors’ Special Report on Agreements Involving
Directors).
Claims, litigation and other
exceptional events
On January 15, 2001, Schneider Electric SA filed
a public offer to purchase all outstanding shares
of Legrand SA, by exchanging seven Schneider
Electric shares for two shares of Legrand common stock and two Schneider Electric shares for
one share of Legrand preferred stock.
In light of the appeals filed in France against the
decision by the Conseil des Marchés Financiers
(CMF) to accept Schneider Electric’s offer and by
the Commission des Opérations de Bourse (COB)
to approve the offer prospectus filed jointly by
Schneider Electric and Legrand, CMF has extended
the deadline for the public exchange offer beyond
the date when the court is scheduled to hand down
its ruling. This date has been set for May 3, 2001.
In connection with the divestment of Spie
Batignolles, Schneider Electric SA booked contingency reserves to cover the risks associated with
certain major contracts and projects. Most of the
risks were extinguished during 1997. Reserves for
the remaining risks will be determined on a case
by case basis, to cover management’s estimate of
the risk involved.
To the best of the Company’s knowledge, no other
exceptional event has occurred and no claims or litigation are pending or in progress that are likely to
have a material adverse impact on the Group’s business, assets and liabilities, financial position or
results.
Auditors
Appointment
expires
Statutory auditors
Barbier Frinault et Autres/Arthur Andersen
41, rue Ybry-92576 Neuilly-sur-Seine Cedex
represented by Aldo Cardoso and Pierre Jouanne
Befec - Price Waterhouse, Tour AIG - Cedex 105 - 92908 Paris La Défense 2
represented by Pascale Chastaing-Doblin and Daniel Chauveau
1992
2004
1995
2004
Substitute auditors
Jean de Gaulle, 6, rue de Buzenval - 92210 Saint-Cloud
Dominique Paul, 5, rue Alfred de Vigny - 75008 Paris
1995
1995
2004
2004
Shareholders’ rights
and obligations
a) Annual Shareholders’ Meetings
(article 18 of the bylaws)
All shareholders are entitled to attend Annual
Meetings, regardless of the number of shares
held. The notice of meeting is sent directly by the
Company to holders of registered shares. Holders
of bearer shares are sent the notice of meeting by
the bank or broker that holds their share account.
58
Appointed
in
Holders of both registered and bearer shares are
required to provide evidence of their ownership
of the shares at the time of the Meeting.
The following represent proof of ownership:
• Registered shares: an entry in the Company’s
share register, made at least five days prior to the
date of the Meeting.
• Bearer shares: a certificate issued by the custodian stating that the shares have been placed in a
blocked account, to be deposited at the address
indicated in the notice of meeting at least five
days prior to the date of the Meeting.
The Board of Directors may shorten these deadlines up until the date of the Meeting, which may
be held at the Company’s head office or at any
other location indicated in the notice of meeting.
b) Voting rights
(article 19 of the bylaws)
Voting rights attached to shares are proportionate to
the equity in the capital represented by each share,
assuming that they all have the same par value. Each
share carries one voting right, unless there are any
unavoidable legal restrictions on the number of
voting rights that may be held by any single shareholder.
Notwithstanding the foregoing:
1/ Double voting rights are attributed to fully
paid-up shares registered in the name of the same
holder for at least two years prior to the end of
the calendar year preceding the one in which the
Annual Meeting takes place, subject to compliance with the provisions of the law. In addition, in
the case of a bonus share issue paid up by capitalizing reserves, earnings or additional paid-in
capital, each bonus share allotted in respect of
shares carrying double voting rights will also have
double voting rights.
The minimum holding period to qualify for double
voting rights was reduced from four to two years by
decision of the combined Annual and Extraordinary
Shareholders’ Meeting of June 27, 1995.
2/ At the Annual Meeting, no shareholder may exercise more than 10% of the total voting rights attached to the Company’s shares. The 10% ceiling is
calculated on the basis of the single voting rights and
proxies held by the shareholder concerned. If the
shareholder owns shares carrying double voting
rights, the limit may be raised to 15%, provided that
the 10% ceiling is exceeded solely by virtue of the
double voting rights.
The above ceilings will no longer apply, without
it being necessary to put the matter to the vote at
a further Annual Meeting, if any individual or
legal entity, acting alone or jointly with one or
other individuals or legal entities, acquires or
increases its stake to at least two-thirds of the
Company’s capital through a public tender offer
for all the Company’s shares. In this case, the
Board of Directors will place on record the lifting
of the above ceilings and will amend the bylaws
accordingly.
c) Income appropriation
(article 21 of the bylaws)
Net income for the year less any losses brought
forward from prior years is appropriated in the
following order:
- 5% to the legal reserve (this appropriation is no
longer required once the legal reserve represents
one tenth of the capital, provided that further
appropriations are made in the case of a capital
increase).
- To discretionary reserves, if appropriate, and to
retained earnings.
- To the payment of a dividend.
The Annual Meeting may decide to offer shareholders the opportunity to receive the dividend in
cash or in the form of new shares of common stock.
Dividends not claimed within five years from the
date of payment become time-barred and are paid
over to the State in accordance with the law.
d) Disclosure thresholds
(article 7 of the bylaws)
In addition to the legal disclosure thresholds, the
bylaws stipulate that any individual or legal entity
that owns or controls (as these terms are defined
in article L 233-9 of the Commercial Code) directly
or indirectly, shares or voting rights representing
at least 0.5% of the total number of shares or voting
rights outstanding, or a multiple thereof, is required to disclose said interest to the Company by
registered letter with return receipt requested,
within five trading days of the disclosure threshold
being crossed.
In the case of failure to comply with these disclosure obligations, the shares in excess of the disclosure threshold will be stripped of voting rights at
the request of one or several shareholders owning
at least 2.5% of the Company’s capital, subject to
compliance with the relevant provisions of the law.
These disclosure thresholds were approved by the
combined Annual and Extraordinary Shareholders’
Meetings of June 27, 1995 and May 5, 2000.
e) Identifiable holders of bearer shares
(article 7.3 of the bylaws)
As approved by the combined Annual and
Extraordinary Shareholders’ Meetings of June 30,
1988 and May 5, 2000, the Company may at any
time request that Euroclear identify holders of
bearer shares carrying voting rights either immediately or in the future.
General Presentation of Schneider Electric SA
59
General Presentation of Schneider Electric SA
Business Review
Introduction
The world economy in 2000
The global economy enjoyed a year of exceptional
growth across all continents in 2000.
The United States economy grew by an excellent
5% in volume, led by consumer spending and corporate capital expenditure. This had a positive
impact on emerging markets, particularly in Latin
America and Asia, which consolidated their 1999
rebound. The European economy expanded by
3.3%, its strongest growth in a decade.
Growth rates at a current scope
of consolidation and exchange rates
Europe outside France
France
North America
Rest of World
Total
Growth rates at a constant scope
of consolidation and exchange rates
Europe outside France
France
North America
Rest of World
Total
60
Economic expansion drove especially strong growth
in the Building, Industry and Infrastructure markets.
In addition, Schneider Electric’s business considerably outpaced the markets, supported by the commitment of its teams to meeting the Schneider 2000+
program’s growth and competitiveness targets.
Consolidated sales rose by 15.7% during the year to
€9.7 billion (FF 63.6 billion). At constant scope of
consolidation and exchange rates, comparable sales
excluding high voltage were up 8.3%, while sales
including high voltage were up 7.2%.
By region, sales growth was as follows in 2000:
Sales
at Dec. 31, 2000
(€ bn)
Reported growth
over 12 months
Reported growth
over 12 months,
excluding high
voltage
3.17
1.51
3.24
1.77
10.2%
3.2%
26.7%
20.7%
10.1%
3.3%
26.2%
31.4%
9.70
15.7%
17.1%
Reported growth
over 12 months
Reported growth
over 12 months,
excluding high
voltage
3.17
1.51
3.24
1.77
8.1%
1.5%
9.4%
7.3%
8.0%
1.5%
8.9%
15.6%
9.70
7.2%
8.3%
Sales
at Dec. 31, 2000
(€ bn)
Sales rose faster in Europe, while business
remained firm in North America and the rest
of the world. The low voltage, medium voltage
and industrial control and automation businesses all reported similar growth for the year.
In Europe outside France, sales rose by 8.1% at
constant scope of consolidation and exchange
rates. Growth was driven by the sale of control,
automation and low voltage products in new technology-related industry and infrastructure markets. Customer spending in the energy segment
was more limited.
As forecast, sales in France picked up in the fourth
quarter as a result of a slight improvement in
medium voltage project billings and sustained
favorable trends in the low voltage and industrial
control and automation businesses.
Business grew much more slowly in North
America in the second half than in the first, as
anticipated. Nonetheless, sales ended the year up
8.9%, with all segments reporting an excellent performance supported by a large number of targeted growth initiatives.
Billings rose sharply in the rest of the world
(excluding the high voltage business) and especially in Southeast Asia, Greater China, Latin
America and the Far East.
High voltage billings were very high in the fourth
quarter, but sales declined 16.5% for the year as a
whole. In contrast, order bookings increased 15%.
Extension of the product lineup
and geographic coverage
Schneider Electric has implemented an aggressive
policy of acquisitions and alliances to broaden
the specialty product lineup in its two core businesses, extend its geographic positions and accelerate its growth in high potential markets such as
automation devices, building control and voicedata-image applications.
Electrical distribution
The low voltage business was strengthened in:
Germany, with the acquisition of May & Steffens,
which manufactures distribution switchboards for
the building market.
Hungary, with the acquisition of Prodax, ranked
second in the final low voltage market.
Turkey, with the acquisition of Metesan Lexel
Elektrik, leader in the final low voltage market.
India, with the acquisitions of the miniature circuitbreaker business of S&S Power Switchgear, which
has 130 distributors, and of the low voltage switchgear business of Crompton Greaves, which has 250
distributors and is the country’s leading consumer
electrical equipment company. The aggregate sales
for the two companies total €20 million.
The medium voltage lineup was expanded with
the acquisition of:
France’s Bardin, the world leader in fault detectors for medium voltage distribution networks,
with sales of €11 million.
Australia’s Nu-Lec, a manufacturer of overhead
electrical equipment and the world leader in intelligent control systems, with sales of €30 million.
Other acquisitions included:
UK-based MITA Holdings, the country’s topranked manufacturer of PVC cable management
systems and composite building equipment, with
sales of €31 million.
US-based EFI Electronics, a surge suppression
specialist, with sales of €14 million.
The prepayment metering systems business of
South Africa’s Conlog, the local leader in electricity prepayment systems, with sales of €20 million.
In the highly promising market for Power Line
Carrier products, which transmit digital data over
electrical lines, Schneider Electric formed an
equally-owned joint venture with Thomson
multimedia, the leader in PLC communication
technologies in the United States. The partners
are developing a comprehensive range of products
for the residential and building control markets.
The Company increased its equity interest in MGEUPS Systems, the world leader in power protection
systems, to 33%. It also acquired a stake in Infra+,
France’s premier LAN wiring company. Together,
these acquisitions represented an investment of €80
million. MGE-UPS Systems reported sales of €640
million in the fiscal year ending September 30, 2000.
■
■
■
■
■
■
Highlights of the Year
Success of the Schneider 2000+ program
The Schneider 2000+ program was implemented in
early 1999 to drive organic development exceeding
market growth by two points, acquisitions capable of
adding €1.5 billion to consolidated sales over five
years (1999 to 2003) and a €305 million reduction
in base costs over three years (1999 to 2001).
Thanks to rapid deployment, the program’s operating margin target was reached in 2000, a year ahead
of schedule. During the year, the margin widened to
13.4% from 12.6% in 1999, while cost savings
amounted to €140 million (for a total of €220 million over two years).
Completion of the refocusing process
The process of refocusing the business base on electrical distribution and industrial control and automation was completed in 2000 with the contribution of
the high voltage operations, which lacked critical
mass, to a joint venture set up with Austria’s VA tech.
VA tech Schneider Electric High Voltage is managed by VA tech, which owns 60% of the new subsidiary. It ranks third in its market with estimated
2001 sales of €620 million and will be accounted
for by the equity method in 2001.
■
■
■
Business Review
61
Business Review
Industrial control and automation
Outlook for 2001
Schneider Electric is now the world leader in
variable speed drives through a joint venture
with Toshiba, in which it has a 60% interest. The
Company has also become the European leader
in electronic control, small automation devices
and motion control with the acquisitions, in an
aggregate amount of €437 million, of:
2001 will be shaped by the friendly merger with
Legrand, which will:
- create the world leader in electrical distribution
and industrial control and automation.
- leverage the extraordinarily strong fit between
partners’ expertise, businesses and geographic
coverage.
The financial resources will enhance the growth
outlook for all the business activities of the new
Company, which will be known as Schneider
Electric Legrand, and enable it to implement an
ambitious growth strategy.
The merger will be carried out through a public
offer, opened in January 2001, to exchange
Schneider Electric shares for Legrand shares.
With pro forma sales of €12.5 billion, 2000 net
income of €860 million, operating income of €1.8
billion and shareholders’ equity of €5.9 billion,
the new Company will be the industry benchmark
and enjoy excellent prospects for creating value.
When the offer was announced, for example, it
was indicated that synergies and other benefits of
the merger would improve earnings per share as
from 2003. In all, synergies are expected to increase operating income by €210 million, reduce costs
by €120 million (€45 million in purchases,
€20 million in supply chain costs and €55 million
in development costs and base costs), and represent €90 million in revenue synergies.
The new Company will be well positioned to leverage the significant growth potential offered by
electricity markets, in particular through the integration of new information and communication
technologies.
The friendly nature of the transaction provides a
strong foundation for success.
France’s Crouzet Automatismes, the leader in
electronic control and small automation devices,
with sales of €180 million.
■
Switzerland’s Positec, Europe’s top-ranked motion
control company, with sales of €118 million.
■
The specialty products lineup has been broadened with two acquisitions in the United States:
Steeplechase Software, which develops PC-based
automation control software.
■
Quantronix, the US leader in infrared and laser sensing cubing and weighing systems for sorting parcels
and objects.
■
A New, Market-Oriented
Organization
During the year, Market Divisions were created for
each of our four core global markets:
Buildings, Industry, Infrastructure and Energy.
The new organization meets the expectations of
customers who are increasingly seeking end-to-end
solutions, such as a turnkey electrical installation or
an automation system.
This shift in demand is a powerful growth driver for
Schneider Electric, which is actively expanding
lineups to meet the full range of demand by creating
new products, integrating new specialty capabilities
and developing its services offer.
An organization dedicated to leading international
OEMs has also been created to provide cost-effective solutions and services.
Creation of a Cross-Functional
e-Business Division
Integration of the Internet into the Company’s
business processes and markets picked up pace in
2000, enhancing the competitiveness of Schneider
Electric and its customers and strengthening the
Company’s leadership in transparent access to
information. In response, a new cross-functional
e-business division was set up to pilot Schneider
Electric’s global e-transformation in the areas of
sales, marketing, purchasing, training and information and to coordinate the Company’s Internet
services. The goal is to move 45% of sales and training transactions, 70% of technical support and
80% of MRO procurement online by end-2002.
62
Research and Development
Schneider Electric conducts a wide variety of
research and development programs to maintain
its technological leadership and generate high
value-added growth. Some 3,500 employees are
involved in R&D at 50 locations in 20 countries.
R&D spending totaled €474 million in 2000,
equal to nearly 5% of consolidated sales.
R&D programs are deployed in close cooperation
with customers and production units. In addition,
around 30 scientific cooperation agreements have
been signed with university-based research facilities around the world.
R&D focuses on renewing product lineups and
introducing innovations by integrating new technologies. The two main aims are to make products
easier to install and use by operators, integrators
and distributors and to constantly enhance the
flexibility, scalability and sustainability of
Schneider Electric products and systems. In 20002001, 12 renewed product families are accounting
for 20% of sales.
R&D also works to lower costs and shorten time
to market. In the past three years, development
cycles have been reduced by half through the use
of concurrent engineering and, increasingly, digital modeling.
R&D is highly decentralized. Close cooperation
among country units encourages sharing of innovation and cross-fertilization. This organization
allows Schneider Electric to develop global products and to tailor lines to the specific features of
local markets. This is why the Company is one of
the few global suppliers to deliver an offering
meeting a full range of standards worldwide.
As a member of the World Wide Web Consortium
to develop common Web Automation standards,
an area in which it is the world leader, Schneider
Electric is speeding the development of Webenabled products and systems. Already, products
that can be remote controlled via the Internet
account for 20% of sales.
Schneider Electric Ventures, a €50-million fund,
has been set up to invest in start-ups focusing on
technological innovations and advanced Internet
applications such as integrated sensors, onboard
intelligence, power electronics, microgeneration
and voice-data-image networks.
Environmental Protection
Environmental
protection,
lower
resource
consumption, energy conservation and design-forrecycling options are built into every Schneider
Electric product and production process.
Programs to earn ISO 14001 certification continued
in the United States, Greece and Brazil. In all, more
than 100 sites worldwide have been certified since
the standard was published in 1996. Integration of
environmental protection concerns into management processes is supported by extensive employee
training, under the direct responsibility of line
managers.
Hard-to-recycle materials are gradually eliminated
during the design phase, while high-performance
software is used to assess the environmental impact
of products at every stage of their life cycle. One
example is the EIME decision-support program
that helps designers choose appropriate materials
and design.
The Purchasing and Research departments are also
involved in selecting the Best Available Techniques
for ensuring environmentally-friendly product
manufacturing.
Schneider Electric actively studies options for endof-cycle electrical and electronic product recycling.
In particular, the ELEN pilot project is defining economic models for product collection and recycling.
Consolidated Financial Statements
Balance sheet
1) Consolidated shareholders’ equity came to
€4.55 billion at December 31, 2000, compared with
€4.26 billion the year before. The increase stemmed
from (a) earnings for the year, which rose to
€0.62 billion from €0.48 billion in 1999; (b) the
issuance of €0.01 billion worth of new shares in
connection with the conversion of bonds, the employee
share ownership plan and the exercise of stock options;
and (c) the translation adjustment, in an amount of
€0.08 billion. It also reflected the dividend payment of
€0.26 billion and share buyback programs, in an
amount of €0.16 billion.
Minority interests amounted to 0.065 billion, including
minority interests in 2000 net income.
2) Net indebtedness (borrowings less cash)
amounted to €2.1 billion at December 31, 2000,
compared with a year-earlier figure of €1.17 billion.
At year-end, the Company had cash and shortterm investments of €0.65 billion versus €1.05 billion at end-1999. The decline resulted from a
variety of factors, including the increase in capital expenditure and financial investments, the
purchase of Company shares under the share
buyback program and the impact of net income
for the year.
Long-term debt increased by €0.55 billion, primarily due to a €0.5 billion bond issue to finance
acquisitions. Short-term debt (bank overdrafts and
current maturities of long-term debt) remained
unchanged.
Net cash and cash equivalents (cash and short-term
investments less bank overdrafts) declined to €0.42
billion from €0.95 billion at December 31, 1999.
3) Working capital requirement rose to €1.50 billion at December 31, 2000 from €1.14 billion at the
previous year-end. The €0.36 billion year-on-year
increase reflects the sustained growth in business in
2000, as well as the currency effect, particularly with
the steep rise in the dollar and related currencies.
4) Working capital stood at €1.45 billion at year-end
2000 versus €1.49 billion the year before. The €0.04 billion decrease can be analyzed as follows:
Business Review
63
Business Review
(in € billions)
2000/1999
Change in working capital
Change in property, plant and equipment, net of depreciation and disposals
Change in net goodwill and other intangible assets
Change in investments at cost and other investments
+
+
+
0.16
0.35
0.34
Total changes in fixed assets
+
0.85
+
–
0.55
0.04
Change in net assets
- Issuance of shares
- Payment of dividends
- Change in retained earnings (including net income for the year)
- Change in minority interests
+
–
+
0.02
0.26
0.54
–
Total changes in long-term liabilities and equity
+
0.81
Net change in working capital
–
0.04
Change in long-term debt
Change in provisions for contingencies and pensions
Consolidated statement of income
Consolidated sales totaled €9.70 billion in 2000, up
15.7% from €8.38 billion the year before.
At constant scope of consolidation and exchange
rates, the year-on-year increase was 7.2%.
Sales
(in € millions)
Schneider Electric
Total
2000
1999
Variation
2000/1999
9,695.5
8,378.3
+ 15.7 %
9,695.5
8,378.3
+ 15.7 %
2000
1999
Variation
2000/1999
1,298.2
1,056.5
+ 22.9 %
1,298.2
1,056.5
+ 22.9 %
Operating income increased by 22.9% to
€1.30 billion, led by an across-the-board improvement in Group performance in most regions.
Operating income
(in € millions)
Schneider Electric
Total
64
Net interest expense amounted to €16.2 million,
compared with €86.1 million in 1999. The improvement reflects continued optimization of trading
and position management, supported by a very
strong performance in foreign exchange markets,
which offset a rise in interest expense following the
increase in net debt. In addition, net interest expense includes a non-recurring €79.7 million in currency gains on subordinated debt and capital gains
on mutual fund investments.
Income from continuing operations before tax,
representing operating income less net interest
expense, rose 32% to €1,282.0 million from €970.4
million the previous year.
Net non-recurring expense amounted to €118.4 million in 2000 compared with €34.6 million the year
before. The expense reflects capital gains and losses
on direct and indirect asset disposals, as well as the
impact of the revaluation of certain specific, technical and financial risks.
Net income of fully consolidated companies
before amortization of goodwill amounted to €793.7
million, compared with €618.1 million in 1999.
(in € millions)
Schneider Electric
Total
2000
1999
793.7
618.1
793.7
618.1
Amortization of goodwill totaled €143.4 million
compared with €121.9 million in 1999. The increase is primarily attributable to acquisitions during the
year (€8.8 million) and the impact of the dollar
exchange rate on Square D’s goodwill amortization.
Current and deferred taxes for 2000 totaled
€369.9 million versus €317.7 million in 1999.
Net income of fully consolidated companies
rose to €650.3 million from €496.2 million in
1999. After minority interests and the Group’s
share of losses of companies accounted for by the
equity method (€3.6 million on MGE-UPS), net
income attributable to Schneider Electric SA totaled
€625 million versus €481 million the previous
year.
Company Financial Statements
Schneider Electric SA posted total portfolio revenues of €318.4 million in 2000, compared with
€248.2 million the previous year. Income from
continuing operations before tax rose to €358.4
million from €248.8 million in 1999.
In 2000, the Company had an income tax charge of
€1.5 million, compared with a tax benefit of €50.9
million the previous year, reflecting the effects of tax
consolidation.
Net income for the year stood at €356.7 million versus €316.7 million in 1999.
Shareholders’ equity before appropriation of net income declined to €3,157.1 million at December 31,
2000 from €3,331.9 million at the previous year-end,
reflecting net income for the year, the cancellation of
six million shares in an aggregate amount of
€314.8 million and the payment of the 1999 dividend.
Subsidiaries
Schneider Electric Industries SA
Strong business lifted sales to €3.11 billion from
€2.77 billion in 1999. Operating income surged
54.7% to €240.1 million from €155.2 million and
represented 7.7% of sales. Net income came to
€503.6 million compared with €294.6 million the
year before.
Cofibel
Cofibel’s portfolio consists entirely of Schneider Electric
SA shares. Income from continuing operations before
tax came to €6.34 million compared with €6.05 million in 1999. Income after tax stood at €4.55 million.
COFIMINES
In 2000, income from continuing operations before
tax amounted to €1.7 million compared with €1.17 million in 1999. After taking into account corporate
income tax and non-recurring items, net income stood
at €1.43 million versus €0.99 million in 1999.
Business Review
65
Consolidated Financial Statements
Consolidated Financial
Statements
Consolidated Statement of Income
(in millions of euros, for the year ended December 31)
Sales
Cost of sales
Research and development expenses
Selling, general and administrative expenses
(3)
Total operating expenses
Of which depreciation and amortization
Operating income (3)
Interest expense - net
(note 18)
Income from continuing operations before tax (3)
Non-recurring items
Income taxes
(note 19)
(note 10)
Net income of fully consolidated companies
before amortization of goodwill
Amortization of goodwill
Net income of fully consolidated companies
Group’s share of income/(loss) of companies
accounted for by the equity method
1999
1998
9,695.5
(5,612.2)
(474,4)
(2,310.7)
8,378.3
(4,766.0)
(443.5)
(2,112.3)
7,625.5
(4,344.8)
(401.5)
(2,026.0)
(8,397.3)
(7,321.8)
(6,772.3)
(318.5)
(263.9)
(211.3)
1,298.2
1,056.5
853.2
(16.2)
(86.1)
(58.1)
970.4
795.1
(118.4)
(34.6)
(20.3)
(369.9)
(317.7)
(263.3)
793.7
618.1
511.5
(143.4)
(121.9)
(88.9)
650.3
496.2
422.6
1,282.0
(3.6)
–
(0.8)
Net income before minority interests
646.7
496.2
421.8
Minority interests
(21.7)
(15.2)
(13.2)
Net income (attributable to Schneider Electric SA)
625.0
481.0
408.6
4.18
4.13
3.23
3.19
2.71
2.63
Primary earnings per share (note 20) (in euros)
Diluted earnings per share (note 20) (in euros)
(3) Including employee profit sharing.
The accompanying notes are an integral part of the consolidated financial statements.
66
2000
Consolidated Statement
of Cash Flows
(in millions of euros, for the year ended December 31)
2000
I - Operating activities
Net income before minority interests
646.7
Group share of (income)/loss of companies accounted
for by the equity method (net of dividends received)
2.3
Adjustments to reconcile net income to net cash provided by operations:
Depreciation. amortization and provisions
431.7
Losses (gains) on disposal of assets - net
(88.8)
Other
(1.1)
1999
1998
496.2
421.8
2.8
2.4
400.8
30.2
(1.2)
368.5
(51.4)
(0.6)
740.7
(154.0)
153.4
(42.2)
49.1
Net cash provided by operating activities
before changes in operating assets and liabilities
(Increase) decrease in accounts receivable
(Increase) decrease in inventories and work in process
Increase (decrease) in accounts payable
Change in other current assets and liabilities
990.8
(223.7)
(247.9)
193.1
(1.7)
928.8
(107.6)
(48.3)
29.7
(73.9)
Change in working capital requirement
(280.2)
(200.1)
710.6
728.7
747.0
II - Investing activities
Disposals of property, plant and equipment and intangible assets
Purchases of property, plant and equipment and intangible assets (note 3)
36.5
(504.2)
47.4
(442.9)
57.9
(381.3)
Net cash used by investment in operating assets
Financial investments - net
Other long-term investments
(467.7)
(528.2)
(227.4)
(395.5)
(851.0)
(295.3)
(323.4)
54.4
(206.4)
Total I
(a
Sub-total
(1,146.3)
(152.0)
(1,223.3)
(1,541.8)
(475.4)
285.5
11.9
(263.7)
(21.4)
1,077.3
85.2
(164.0)
(17.8)
(125.0)
6.9
(148.2)
(11.9)
Total III
12.3
980.7
(278.2)
Total IV
25.9
46.3
30.8
(474.5)
213.9
24.2
952.9
(474.5)
738.9
213.9
714.7
24.2
478.4
952.8
738.9
III - Financing activities
Increase (reduction) in long-term debt
Common stock issued
Dividends paid: Schneider Electric SA
Minority interests
Net increase/(decrease) in cash and cash equivalents: : I + II + III + IV
Cash and cash equivalents at beginning of year
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at end of year
(a
(755.6)
Total II
IV - Net effect of exchange rate and other changes
(a
6.3
(a) Including the purchase of Schneider Electric SA shares for €159.5 million in 2000, €335.7 million in 1999 and €225.6 million in 1998.
Consolidated Financial Statements
67
Consolidated Financial Statements
Consolidated
Balance Sheet
Assets
(in millions of euros, at December 31)
2000
1999
1998
Current assets:
Inventories and work in process
(notes 1 and 8)
Accounts receivable - trade
Other receivables and prepaid expenses
(note 9)
Deferred taxes
Cash and short-term investments
(note 11)
Total current assets
1,411.9
1,090.2
1,086.6
2,225.0
1,933.1
1,709.0
946.4
730.2
726.6
248.3
291.1
280.6
653.5
1,050.5
924.6
5,485.1
5,095.1
4,727.4
192.0
85.5
44.2
3,620.0
3,374.6
3,132.4
Non-Current assets:
Other intangible assets - net
Goodwill - net
(note 3)
(note 4)
Property. plant and equipment. at cost
(note 3)
Accumulated depreciation
Property. plant and equipment – net
Investments accounted for by the equity method
Investments at cost
Other investments
(note 5)
(note 6)
(note7)
Total investments
Total non-current assets
Total assets
The accompanying notes are an integral part of the consolidated financial statements.
68
4,011.6
3,627.1
3,278.6
(2,312.7)
(2,085.2)
(1,911.9)
1,698.9
1,541.9
1,366.7
58.0
2.7
8.1
342.7
112.5
154.6
137.1
80.2
214.3
537.8
195.4
377.0
6,048.7
5,197.4
4,920.3
11,533.8
10,292.5
9,647.7
Liabilities and shareholders’ equity
(in millions of euros, at December 31)
2000
1999
1998
Current liabilities:
1,613.1
1,348.6
1,186.8
Taxes and benefits payable
Accounts payable – trade
838.8
749.7
686.0
Other payables and accrued liabilities
807.6
699.3
845.4
Short-term debt
698.1
700.4
700.4
86.7
107.3
147.1
4,044.3
3,605.3
3,565.7
218.0
274.4
272.6
586.7
569.5
510.2
1,897.9
1,320.0
1,376.5
1,460.0
1,020.8
1,014.5
175.7
202.1
224.2
2,073.6
1,522.1
1,600.7
4,545.3
4,260.4
3,637.1
65.9
60.8
61,4
11 533.8
10 292.5
9 647.7
(note 15)
Customer prepayments
(note 1)
Total current liabilities
Provisions for contingencies
Provisions for pensions
Long-term debt
(note 14)
(note 13)
(note 15)
of which: ordinary and convertible bonds
Perpetual bonds
(note 15)
Total long-term debt
Shareholders’ equity
(note 12)
Minority interests
Total liabilities and shareholders’ equity
The accompanying notes are an integral part of the consolidated financial statements.
Consolidated Financial Statements
69
Consolidated Financial Statements
Consolidated Statement of
Changes in Shareholders’
Equity
Shares
outstanding
(thousands)
(1)
At January 1, 1998
Exercise of stock options
Conversion of bonds
Appropriation to legal reserve
Dividends
Increase in treasury stock
Translation adjustment
Change in scope
of consolidation and other
1998 net income
At December 31, 1998
Exercise of stock options
Conversion of bonds
Appropriation to legal reserve
Dividends
Increase in treasury stock
Translation adjustment
Change in scope
of consolidation and other
1999 net income
At December 31, 1999
(€M)
152,168
1,160.0
242
1,007
1.7
7.7
Additional
paid-in
capital
(€M)
1,134.1
5.0
28.7
(11.6)
Retained
earnings
Cumulative
translation
(2) adjustment
(€M)
(€M)
1,322.2
11.6
(148.2)
(175.9)
(13.1)
–
408.6
153,417
1,169.4
2,239
5,768
17.1
43.9
1,156.2
68.1
184.6
(0.9)
1,405.2
0.9
(173.2)
(337.2)
(13.6)
(122.4)
–
(93.7)
352.6
–
161,424
155,788
1,230.4
1,408.0
1.7
1.1
3.7
4.8
61.0
(48.0)
(61.0)
(263.0)
28.2
(6.1)
1,363.1
258.9
311.0
(28.2)
6.1
(263.7)
(159.5)
(72.6)
149.2
(4.7)
625.0
1,246.2
1,114.6
1,776.5
(1) Before elimination of treasury stock.
(2) Including €592.7 million in treasury stock/ intra-group cross shareholdings cancelled beginning January 1, 1993.
70
28.7
481.0
Exercise of stock options
212
Conversion of bonds
152
Conversion of par value
into euros
Cancellation of shares
(6,000)
Merger with SGTE
Appropriation to legal reserve
Dividends
(including withholding tax)
Increase in treasury stock
Translation adjustment
Change in scope
of consolidation and other
2000 net income
At December 31, 2000
Capital
stock
408.1
Share Minority
holders’ interests
equity
(€M)
(€M)
3,645.0
6.7
36.4
–
(148.2)
(175.9)
(135.5)
–
408.6
3,637.1
Total
(€M)
72.8 3,717.8
(2.4)
6.7
36.4
–
(160.1)
(175.9)
(137.9)
(13.3)
13.3
(13.3)
421.9
(11.9)
58.5 3,695.6
85.2
228.5
–
(173.2)
(337.2)
339.0
(17.8)
7.0
85.2
228.5
–
(173.2)
(355.0)
346.0
(2.1)
481.0
(2.1)
15.2
496.2
4,260.4
60.8 4,321.2
5.4
5.9
5.4
5.9
–
–
–
–
–
–
–
–
(263.7)
(159.5)
76.6
(21.4)
0.1
(285.1)
(159.5)
76.7
(4.7)
625.0
4.7
21.7
–
646.7
4,545.4
65.9 4,611.3
Consolidated Financial Statements
Notes
to the Consolidated Financial
Statements
1. Accounting principles
c) Translation of foreign currency transactions
The consolidated financial statements of Schneider
Electric SA have been prepared in accordance with
French generally accepted accounting principles,
including French Accounting Standards Board
(CRC) standard 99-02. In certain specific cases
where no French accounting principles are appropriate, US principles have been applied.
The financial statements of consolidated subsidiaries, which are prepared in accordance with
accounting principles generally accepted in the
countries in which they operate, have been restated
in accordance with the principles applied by the
Group.
With the exception of the transactions described
below, foreign currency debts and receivables are
translated into euros at year-end exchange rates.
As allowed under French law, translation
differences are recorded in the statement of
income under exchange gains or losses.
Exchange gains and premiums and discounts on
forward purchases and sales of foreign currency
used to hedge the Group’s trading commitments
are deferred and recognized at the same time as
the gain or loss on the underlying transaction.
Gains and losses on unhedged forward currency
transactions are credited or charged to income. The
gain or loss corresponds to the difference between
the forward exchange rate provided for in the
contract and the exchange rate prevailing at yearend for purchases and sales made in the same currency with the same term.
In cases where a speculative currency position is
considered to exist due to the future interest on
fixed to variable currency swaps, the interest is
discounted on the basis of the fixed rate and stated
at the exchange rate prevailing at year-end for
cash transactions. The translation difference is
credited or charged to income.
a) Consolidation principles
All significant companies that are controlled
directly or indirectly by Schneider Electric SA
have been fully consolidated. Companies over
which Schneider Electric SA exercises significant
influence have been accounted for by the equity
method.
In accordance with French generally accepted
accounting principles, joint-ventures in which the
Group is the managing partner are fully consolidated by Schneider Electric SA after deducting the
other partners’ share in the income or loss of the
joint-venture. In cases where the Group is not the
managing shareholder, only Schneider Electric
SA’s share of the income or loss is accounted for,
except for one contract that has been consolidated
by the proportional method.
Goodwill is amortized out of income over a maximum of forty years based on the estimated period
of benefit, which is adjusted where necessary.
b) Translation of the financial statements
of foreign subsidiaries
The financial statements of foreign subsidiaries
are translated into French francs as follows:
Assets and liabilities are translated at year-end
exchange rates.
Statement of income and cash flow items are
translated at average exchange rates.
Differences arising on translation are recorded
under shareholders’ equity and minority interests.
■
■
d) Financial instruments based on exchange
and interest rates
The Group uses financial instruments based on
exchange and interest rates (note 16). Where
these instruments are qualified as speculative,
their market value is determined at the year-end,
taking into account the volatility of interest rates.
If this value is negative in relation to the instruments’ historical value, a provision for contingencies is booked.
e) Marketable securities
Substantially all marketable securities represent
conventional short-term instruments (commercial
paper, mutual funds and equivalents). They are
stated at the lower of cost and market. In the case
of bonds and other debt instruments, cost includes
accrued interest.
Consolidated Financial Statements
71
Consolidated Financial Statements
f) Property, plant and equipment
k) Deferred taxes
Land, buildings and equipment are stated at cost.
Assets held at the time of a legal revaluation are
stated at revalued cost; an equivalent amount is
recorded in shareholders’ equity, under retained
earnings or revaluation reserve, and is written back
to income to match the corresponding depreciation
and disposals, so that the revaluation has no impact
on income.
Property, plant and equipment are depreciated on
a straight-line basis over the estimated useful lives
of the assets, as follows:
Deferred taxes, corresponding to timing differences between the recognition of income and
expenses for consolidated financial reporting and
tax purposes, are accounted for by the liability
method. Deferred tax assets are recognized in
cases where they can reasonably be expected to be
realized within a short time frame. Otherwise, a
provision is set aside to reflect the timing difference.
Extraordinary credits corresponding to the future
tax benefits arising from the utilization of tax loss
carryforwards (including amounts available for
carryforward without time limit) are recognized
only where they can reasonably be expected to be
realized within a short time frame.
Buildings
Other
20 to 40 years
3 to 12 years
Property, plant and equipment acquired under a
capital lease are capitalized on the basis of the cost
of the asset concerned and depreciated in accordance with the above principles. An obligation in the
same amount is recorded on the liabilities side of
the balance sheet.
g) Investments at cost (note 6) and other
investments
Non-consolidated equity investments and other
investments are stated at cost. Each year, the carrying value is compared to fair value and any difference is provided for. Fair value is determined
by reference to the Group’s equity in the underlying net assets, the expected future profitability
and business prospects of the investee company
and, in the case of listed securities, the market
value of the stock.
h) Inventories and work in process
Inventories and work in process are stated at the
lower of cost (determined by the FIFO method)
and estimated net realizable value. The cost of
work in process, semi-finished and finished products
includes direct materials and labor costs,
sub-contracting costs incurred up to the balance
sheet date and a percentage of production overheads.
i) Long-term contracts
Income from long-term contracts is recognized by
the percentage-of-completion method, based on
the financial status of the contract. Probable
losses upon completion of a given contract are
provided for in full as soon as they become
known.
The cost of work in process includes costs relating
directly to the contracts and a percentage of overheads.
j) Research and development expenditures
Internally-financed research and development
expenditures are charged to income for the period.
72
l) Provisions for pensions
Provisions for statutory retirement bonuses and
pensions are determined in accordance with SFAS
no. 87 and SFAS no. 88, completed by SFAS no.
132, taking into account future compensation
levels. Two methods are used to fund the Group’s
liability for statutory retirement bonuses:
Provisions. The provision is calculated for all eligible employees based on the future liability discounted at a standard rate each year for all Group
companies using this funding method.
External funding under an insured plan. In this
specific case, provision is made to cover any deficit
between the fair value of plan assets and the estimated future liability.
The Group’s policy concerning the recognition of
changes in provisions for statutory retirement
bonuses is as follows:
Changes resulting from the recurring discounting
of the liability and changes in certain variables
(length of service, number of eligible employees,
etc.) are recognized in full in the statement of
income when they arise.
Changes resulting from periodic actuarial valuations (changes in the discount rate, future salary
levels, staff turnover rates) are deferred and recognized over the remaining service of the employees
concerned.
■
■
■
■
m) Provisions for post-retirement benefits
Under SFAS no. 106, companies are required to book
provisions to cover the cost of providing healthcare
benefits for retired employees and to make certain disclosures concerning the method used to calculate these
provisions.
n) Perpetual bonds (note 15)
The perpetual subordinated bonds issued in 1991
by Merlin Gerin were originally accounted for as
subordinated loans repayable over 15 years. In
1996, the subordination clause was canceled. All
other terms and conditions remain unchanged.
o) Consolidated statement of cash flows
The consolidated statement of cash flows has been
prepared using the “indirect method”, showing
the reconciliation of net income to net cash provided
by operations.
Net cash and cash equivalents represent cash net
of bank overdrafts plus cash equivalents (primarily marketable securities).
Changes in short-term assets and liabilities cannot
be determined directly by comparing the amounts
shown in the balance sheet, since these items are
stated before effects of foreign currency translation, which are shown separately for their total
amount.
p) Monetary unit
The tables below are presented in millions of
euros, unless otherwise indicated.
2. Changes in scope of consolidation
The consolidated financial statements of Schneider Electric SA and subsidiaries at December 31, 2000
include the financial statements of the companies listed in note 24. The scope of consolidation at
December 31, 2000 can be summarized as follows:
Number of Companies
Parent company and fully consolidated subsidiaries
Companies accounted for by the equity method
Sub-total by region
Total
Dec. 31, 2000
France
Abroad
54
1
55
232
2
234
289
Dec. 31, 1999
France
Abroad
47
–
47
210
2
212
259
Consolidated Financial Statements
73
Consolidated Financial Statements
The main changes in 2000 were as follows:
Changes in scope of consolidation
Newly-consolidated
France :
Etablissements Bardin
Crouzet Automatismes
Euromatel (1)
Infra + (2)
MGE – UPS (2)
Deconsolidated
(3)
(2)
Rest of Europe:
May & Steffens (Germany) (1)
Schneider Electric Ltd (Croatia) (2)
Dalcotech A/S (Denmark) (2)
JO-EL A/S (Denmark) (2)
EFI Electronics Europe SL (Spain) (2)
JO-EL Oy (Finland) (2)
Oy Elektrokontakt (Finland) (2)
Coelme (Italy) (2)
Industrisitering AS (Norway) (2)
Telesafe Produktor AS (Norway) (2)
Schneider Logistics BV (Netherlands) (1)
Schneider Electric Ltd (Slovenia) (1)
JO-EL AB (Sweden) (2)
Schneider Electric Ukraine (Ukraine) (1)
North America:
EFI Electronics Inc (United States)
Quantronix Inc (United States) (2)
Rest of world:
Merlin Gerin South Africa (Pty) Ltd Conlog business
(South Africa) (2)
Metesan Lexel Elektrik (Turkey) (2)
Nu-Lec Industries Pty Ltd (Australia) (2)
Primelectrica (Brazil) (2)
Schneider Electric Low Voltage (Tianjin) Cy Ltd (China)
Schneider Electric FZE (United Arab Emirates) (1)
Schneider Electric Peru SA (Peru) (1)
(1) New companies set up to acquire existing assets and business start-ups.
(2) Acquisitions.
(3) Merged with Schneider Electric SA.
74
Cie Financière SGTE
(2)
Simak (Belgium)
Nokia Capacitors (Finland)
Paramer (Switzerland)
SEEP (Brazil)
Schneider Control Products (South Korea)
FPE de Mexico SA de CV (Mexico)
(1)
3. Property, plant and equipment and intangible assets
Property, plant and equipment, including capital leases, and intangible assets can be analyzed as follows:
Intangible assets
Dec. 31, 1999
At cost
Depreciation and amortization
Net value
Acquisitions/
Allocation
175.4
(89.9)
85.5
89.6
(36.8)
52.8
Disposals/
Recapture
(4.2)
4.1
(0.1)
Translation
adjustment
Other Dec. 31, 2000
(a)
(3.2)
(0.5)
(3.7)
67.5
(10.0)
57.5
325.1
(133.1)
192.0
(a) Of which a net €50.8 million resulting from changes in scope of consolidation.
Property, plant and equipment
At cost
Land and buildings
Plant and equipment
Other
Total
Of which leased assets
Depreciation and amortization
Land and buildings
Plant and equipment
Other
Total
Of which leased assets
Net value
Dec. 31, 1999
Acquisitions
Disposals
Translation
adjustment
Other Dec. 31, 2000
(a)
933.6
2,058.7
634.8
90.8
223.3
95.5
(46.9)
(91.5)
(48.4)
17.1
40.2
16.2
41.9
65.3
(19.0)
1,036.5
2,296.0
679.1
3,627.1
409.6
(186.8)
73.5
88.2
4,011.6
140.2
0.2
(16.5)
–
–
123.9
Dec. 31, 1999
Allocation
Recapture
Translation
adjustment
Other Dec. 31, 2000
(a)
(409,8)
(1,342,9)
(332,5)
(46.9)
(181.4)
(53.4)
26.0
81.5
42.9
(4.8)
(21.4)
(9.3)
(11.7)
(31.3)
(17.7)
(447.2)
(1,495.5)
(370.0)
(2,085,2)
(281.7)
150.4
(35.5)
(60.7)
(2,312.7)
(78.2)
(4.9)
1,541.9
127.9
12.6
(36.4)
–
38.0
(a)
0.1
(70.4)
27.5
1,698.9
(a) Of which €31.8 million resulting from changes in scope of consolidation.
4. Goodwill
Amortization
period
Square D Company
Groupe Lexel
Telemecanique
Federal Pioneer Ltd
Crouzet Automatismes
Infra +
Merlin Gerin
Mita Holding Ltd
Schneider Automation
Other (a)
Total
40
40
40
40
20
20
30
20
10
5 - 20
years
years
years
years
years
years
years
years
years
years
Gross
Amort- Dec. 31, 2000 Dec. 31, 1999
ization
Net
Net
2,080.2
984.1
802.0
93.7
178.2
19.5
160.7
58.0
35.4
303.6
(492.3)
(49.3)
(279.3)
(26.4)
(1.5)
(0.8)
(57.4)
(3.1)
(17.7)
(167.6)
1,587.9
934.8
522.7
67.3
176.7
18.7
103.3
54.9
17.7
136.0
1,518.5
961.8
542.8
66.6
–
–
108.7
57.9
21.2
97.1
4,715.4
(1,095.4)
3,620.0
3,374.6
(a) Approximately 25 companies.
The change in net values between December 31, 1999 and 2000 primarily reflects the €143 million standard amortization for the year, the €127 million positive effect of exchange
rate fluctuations, and the impact of newly consolidated companies (Crouzet Automatismes and Infra +: €198 million, other European companies: €37.5 million, and US companies:
€25.5 million).
Consolidated Financial Statements
75
Consolidated Financial Statements
5. Investments accounted for by the equity method
The Group’s equity in the net assets of companies accounted for by the equity method amounted to €58.0 million, while its share of the net loss for the year was €3.6 million, corresponding to Schneider Electric SA’s
32.31% interest in MGE-UPS Group and the acquisition holding companies that together comprise the
MGE Finance subgroup.
Because the MGE Finance subgroup has a September 30 year-end, Schneider Electric SA has consolidated
its share of the loss for the period from April 1 to September 30, 2000, as allowed under French accounting
standards.
The following table presents summarized balance sheet and statement of income data for the six months
ending September 30, 2000.
Balance Sheet at September 30, 2000
Non-current assets - net (of which goodwill: 623.6)
Current assets and cash and equivalents
685.8
375.6
1,061.4
Shareholders’ equity including minority interests (of which net loss for the period: 11.5)
Long-term debt (including provisions)
Current liabilities and deferred income (33.9)
368.8
384.6
308.0
1,061.4
Consolidated Statement of Income (April 1 – September 30, 2000)
Sales
Cost of sales
Selling, general and administrative expenses
355.2
(240.8)
(87.2)
Operating income
27.2
Interest expense - net
Amortization of goodwill
Income taxes
(18.6)
(15.9)
(3.4)
Net loss of fully consolidated companies
(10.7)
Minority interests
(0.7)
Net loss attributable to MGE Finance
(11.4)
6. Investments at cost
I - Listed companies
Finaxa
Clipsal / Goldpeak
Others
Total listed investments
(1)
Provisions
54.8
52.5
2.8
–
–
–
54.8
52.5
2.8
51.1
–
–
110.1
–
110.1
51.1
–
8.1
8.8
–
–
44.5
II - Unlisted companies (2)
COMIPAR
SIAP
Muller et Cie
Positec (2)
Delta Dore (2)
Other unlisted companies (3)
16.4
8.1
8.8
181.7
7.0
36.8
(16.4)
–
–
–
–
(9.8)
–
8.1
8.8
181.7
7.0
27.0
Total unlisted investments
258.8
(26.2)
232.6
61.4
Total investments at cost
368.9
(26.2)
342.7
112.5
297.8
190.7
(1) Estimated market value of listed investments at Dec. 31 (€ million):
(2) Mainly investments in Group subsidiaries that either do not meet the criteria for consolidation or that will be consolidated in 2001.
(3) Valued at less that €1.5 million each.
76
Dec. 31, 2000 Dec. 31, 1999
Net
Net
Cost
7. Other investments
Cost
Loans to non-consolidated companies
Other investments (deposits, prepaid rents)
Total
Provisions
Dec. 31, 2000
Net
Dec. 31, 1999
Net
86.6
119.6
(3.7)
(65.4)
82.9
54.2
20.1
60.1
206.2
(69.1)
137.1
80.2
Dec. 31, 2000
Dec. 31, 1999
664.4
367.9
421.7
137.8
464.2
336.2
361.3
101.4
1,591.8
1,263.1
8. Inventories and work in process
Raw materials
Work in process
Semi-finished and finished products
Goods
Inventories and work in process at cost
Allowances
(179.9)
Inventories and work in process - net
(172.9)
1,411.9
1,090.2
Dec. 31, 2000
Net
Dec. 31, 1999
Net
9. Other receivables and prepaid expenses
Gross
Operating receivables, tax credits
and non-operating receivables
Prepaid expenses
Other
Total
Allowances
704.7
278.1
45.5
(51.4)
(30.5)
–
653.3
247.6
45.5
529.0
181.1
20.1
1,028.3
(81.9)
946.4
730.2
Consolidated Financial Statements
77
Consolidated Financial Statements
10. Income taxes
Wherever possible, Group entities file consolidated tax returns, as allowed under French law. Schneider
Electric SA files a consolidated tax return with its French subsidiaries held directly or indirectly through
Schneider Electric Industries SA.
Analysis of the tax charge for the year
2000
Current taxes
France
International
Use of tax loss carryforwards
Net
Deferred taxes
59.9
260.6
(12.5)
308.0
61.9
Total
369.9
The reconciliation of taxes payable and pre-tax income is as follows:
2000
Net income (after minority interests)
Taxes payable
Minority interests
Less: net income of companies accounted for by the equity method
Pre-tax income
Income tax liability calculated at the statutory rate (37.76%)
Reconciliation items
Amortization of goodwill
Other permanent differences
Tax credit
Difference between French and foreign tax rates
Income taxable at reduced rates
Tax losses arising in current year
Use of tax loss carryforwards
Other
Net taxes payable
625.0
369.9
21.7
3.6
1,020.2
385.2
55.5
(3.0)
(15.5)
(42.8)
(8.2)
6.7
(9.6)
1.2
369.5
The actual tax charge for 2000 reflects the utilization of tax loss carryforwards, as was the case in prior
years. The non-deductibility of goodwill amortization generated and will continue to generate an increase
in the actual tax charge, which is currently partially offset by the tax benefits resulting from the utilization
of tax credits and tax loss carryforwards.
Deferred taxes break down as follows:
2000
Tax loss carryforwards and tax credits
Provisions for pensions
Other provisions
Other deferred tax assets
Total deferred tax assets
2.3
90.7
105.0
50.3
248.3
Excess tax depreciation
Untaxed provisions
Other deferred tax liabilities
86.3
33.5
51.3
Total deferred tax liabilities
171.1
Deferred taxes are presented in the balance sheet at December 31, 2000 as follows:
Deferred tax assets
Provision for deferred tax liabilities (included in taxes and benefits payable)
Net deferred tax assets
78
248.3
(171.1)
77.2
11. Cash and short-term investments
Marketable securities consist primarily of highly
liquid mutual funds. Short-term investments in
bonds are stated including accrued interest.
Marketable securities are stated at the lower of cost
or market value. At December 31, 2000, marketable securities included the following: :
2000
1999
145.1
73.7
280.5
60.7
Short-term investments at cost
218.8
341.2
Allowances
Short-term investments - net
(5.4)
213.4
–
341.2
Treasury shares (stock option plans)
Money market instruments and short-term deposits
Other cash and equivalents
50.9
20.6
368.6
50.9
177.4
481.0
Total cash and equivalents
389.2
658.4
Total
653.5
1,050.5
Mutual funds and other pooled investments
Other
12. Shareholders’ equity
Changes in capital stock:
Number of shares
At December 31, 1999
Shares cancelled
Shares issued in connection with:
• Employee stock option plans
• Conversion of Square D convertible bonds
161,423,578
(6,000,000)
At December 31, 2000
155,787,643
Square D bonds convertible into Schneider
Electric SA shares
In November 1992, Square D issued 25,000
convertible bonds with a nominal value of $10,000
per bond. Each bond was originally convertible
into 58.21 former Schneider shares. The parity
was changed to 116.42 Schneider SA (formerly
SPEP) shares per bond in September 1993 and to
232.84 shares per bond in July 1995 following the
merger of Schneider SA (formerly SPEP) and
Schneider SA (formerly Spie Batignolles).
211,790
152,276
The internal rate of return on the bonds is 7% per
year (of which 5% is capitalized). Bonds not tendered
for conversion will be redeemed by Square D, at
par, on January 2, 2003.
During the year, 654 bonds were converted, leading to the creation of 152,275 Schneider Electric
SA shares. At December 31, 2000, 820 bonds
were outstanding.
Consolidated Financial Statements
79
Consolidated Financial Statements
13. Provisions for pensions
Dec. 31, 2000
Dec. 31, 1999
300.4
286.3
316.8
252.7
586.7
569.5
Provisions for pensions
Provisions for post-retirement health care benefits (SFAS no. 106)
Statutory retirement bonuses are payable to
employees on the concerned unit’s payroll at the
time of retirement. The net charge for the period
was €47.8 million. This commitment is primarily
covered by provisions.
Square D’s commitments for post-retirement health
care benefits are fully funded by way of provisions
totaling €286.3 million at December 31, 2000
(€252.8 million at December 31, 1999). The impact
of these commitments on operating income for the
year was a charge of €13.6 million.
Square D’s pension commitments represent a future
liability of €714.2 million. This commitment is covered by hedging instruments held and managed by a
third party that represent assets with an estimated
value of €867.4 million at December 31, 2000.
Analysis of commitments and coverage:
Dec. 31, 2000
Dec. 31, 1999
302.4
286.3
831.7
316.5
252.8
796.2
1,420.4
1,365.5
302.4
284.3
1,000.0
316.8
252.7
935.4
1,586.7
1,504.9
Dec. 31, 2000
Dec. 31, 1999
5.17%
2.0 - 4.5%
Variable
5.33%
2.0 - 4.5%
Variable
Future liability
Statutory retirement bonuses and related commitments excluding Square D
Post-retirement health benefits (SFAS no. 106)
Pension commitments
Future liability
Coverage
Provisions for statutory retirement bonuses
Provisions for post-retirement health benefits (SFAS no. 106)
Hedging instruments held and managed by third party
Total coverage
Actuarial assumptions:
Discount rate (1)
Rate of compensation increases
Rate of return on fund assets (2)
(1) The discount rate corresponds to the rate of return on the TEC 10 government bond at November 30 of each corresponding year.
(2) The rate of return on fund assets is determined separately for each of the Group’s operating regions.
14. Provisions for contingencies
Economic risks
Financial risks
Customer risks
Technical risks
Others
Total
Dec. 31, 1999
Allowances
86.1
7.6
58.9
52.0
69.8
–
–
–
–
2.6
(58.9)
–
(0.1)
–
(6.2)
274.4
2.6
(65.2)
(1) Release of a provision for pension plan coverage set aside in 2000.
80
Releases
Reclassifications
(1)
–
–
19.7
–
(19.7)
–
Translation Dec. 31, 2000
adjustment
–
–
6.2
–
–
27.2
7.6
84.7
52.0
46.5
6.2
218.0
15. Long and short-term debt
Type of debt
Bonds
Perpetual bonds
Bank borrowings
Commercial paper
Obligations under capital leases (note 17)
Bank overdrafts and short-term bank loans
Total bank debt and equivalents
Accrued interest
Employee profit-sharing
Other
Total
Breakdown by maturity
2000
2001
2002
2003
2004
2005
2006 and beyond
Total
Dec. 31, 2000
Dec. 31, 1999
1,451.4
207.2
428.5
200.0
40.8
290.3
1,012.9
224.4
247.5
415.0
49.9
207.0
2,618.2
2,156.7
4.5
8.9
140.1
5.2
8.2
52.4
2,771.7
2,222.5
Dec. 31, 2000
Dec. 31, 1999
698.1 (1)
78.6
64.3
1,134.5
125.4
670.8
700.4
79.4
108.1
149.5
1,056.2
128.9
2,771.7
2,222.5
Dec. 31, 2000
Dec. 31, 1999
1,993.1
173.4
0.5
118.0
163.4
323.3
1,864.3
55.6
5.2
10.7
195.6
91.1
2,771.7
2,222.5
(1) Of which overdrafts (€175.2 million) and short-term bank loans (€115.1 million).
Breakdown by currency
Euro
US dollar (1)
Canadian dollar (1)
British pound
Swedish krona (1)
Other
Total
(1) Mostly local borrowings.
Consolidated Financial Statements
81
Consolidated Financial Statements
The main consolidated borrowings, excluding short-term bank loans and overdrafts, are as follows:
Outstanding
Dec. 31, 2000
Rate
Earliest
maturity
207.2
Pibor + 0.7% fixed swapped
March 2006
b) Bonds
Square D 1992 convertible (see note 12)
Schneider Electric SA 2004
Schneider Electric SA 2007
8.7
1,000.0
450.0
2% + 5% capitalized
3.75% fixed
6.125% fixed
January 2003
April 2004
October 2007
Total
1,458.7
a) Perpetual bonds
Schneider Electric Industries SA (formerly Merlin Gerin)
(1)
c) Other bank borrowings
Syndicated loan (Lexel)
Bank loan (Schneider UK)
Syndicated loan (Schneider Electric SA)
Syndicated loan (Lexel)
Industrial Revenue Bonds (Square D Company)
Other loans (less than €20 million per loan)
158.0
117.0
186.0
43.0
22.3
35.1
Total
561.4
d) Commercial paper
(2)
e) Obligations under capital leases
Variable swapped
Variable swapped
Variable
Fixed
Various
Various
September
Dec. 2001/Dec
November
December
Various
2003
2005
2001
2005
2020
200.0
Fixed
Refinanced
overnight
40.8
Various
Over periods
ranging from
15 to 20 years
The balance of borrowings, €17.8 million, is spread across more than 100 companies for amounts
generally of less than €3 million per company.
(1) Perpetual bonds correspond to perpetual subordinated bonds issued in 1991 by Merlin Gerin, for which the subordination clause has been canceled. The bonds were issued
for €457 million, generating net proceeds of €335 million. Most of the bonds issued were originally swapped for a fixed rate.
(2) Since January 1991, Schneider Electric SA has issued commercial paper on behalf of the whole Group. The majority of these issues are backed by confirmed lines of credit.
Ordinary bonds
On April 14, 1999, Schneider Electric SA issued € 750 million worth of 3.75% bonds due April 14,
2004. On May 28, 1999, a further € 250 million worth of bonds were issued at the same interest rate
and with the same maturity. The second issue is treated as an extension of the first issue.
On October 19 and 20, 2000, Schneider Electric SA issued two tranches of 6.1275% bonds due October 19,
2007, worth respectively € 400 million and € 50 million.
All of these bonds are traded on the Euronext Paris and Luxembourg bond markets.
82
16. Contingent liabilities
a) Commitments given:
Contract counterguarantees
Discounted notes (1)
Mortgages and collateral (2)
Guarantees
Other commitments given
Total
Dec. 31, 2000
Dec. 31, 1999
398.6
8.1
21.3
4.0
31.8
398.7
55.2
23.9
3.2
16.9
463.8
497.9
(1) Refinancing of receivables:
Certain Group companies sell their receivables to financial institutions, for the purpose of managing their cash and working capital. For the Group as a whole, the balance outstanding
under these arrangements was €8.05 million (1999: €55.2 million) at December 31, 2000
(2) Mortgages and collateral:
Certain loans are secured by securities lodged as collateral.
b) Commitments received:
Guarantees
Total
Dec. 31, 2000
Dec. 31, 1999
23.4
29.6
23.4
29.6
c) Financial instruments:
The Group uses financial instruments as a hedge against interest rate and currency risks. This hedging
policy does not include the use of financial futures.
Long-term interest rate swaps
Short-term interest rate swaps
Caps/floors
Forward purchases and sales of foreign currencies
Currency options
Metal price hedges
Total
The main interest rate hedges are as follows:
- Merlin Gerin: swap concerning perpetual bonds
(€ 351 million at December 31, 2000).
- Lexel: swaps and caps/floors to hedge interest rate
risks on the debt taken on in 1998 to finance the
acquisition of Thorsman (€141 million at December
31, 2000).
The breakdown by interest rate of medium and longterm debt, totaling €2,228 million at December 31,
2000, is as follows:
€ 1,922 million
- Less than 7%
- Between 7 and 11%
€ 306 million
Dec. 31, 2000
Dec. 31, 1999
429.0
–
68.0
445.6
–
88.9
316.0
290.0
159.8
449.4
3.4
103.6
1,031.5
1,322.2
The Group hedges currency risks on commercial
transactions through forward purchases and sales
of foreign currencies or through the purchase of
currency options. Almost all of these hedging
transactions concern Schneider Electric Industries
SA. In 2000, currency hedges also included
hedges set up by newly-acquired Lexel to cover
currency risks on its investments in certain Nordic
countries. These contracts matured in February
2000.
Depending on the currency, forward purchases
and sales and currency options cover between 30%
and 100% of commercial transactions for 6 to 12
months in the future.
Consolidated Financial Statements
83
Consolidated Financial Statements
18. Interest expense - net
d) Forward hedging positions by currency
Currency
USD
AUD
CHF
SEK
GBP
SAR
JPY
HKD
NOK
CAD
Other
Total
Purchases
Sales
203.2
–
–
–
–
–
2.8
0.1
–
25.1
–
467.6
59.0
2.0
15.0
91.6
1.3
18.6
0.8
7.0
3.6
10.3
231.2
676.8
e) Other commitments
In 1998, as part of a restructuring plan to optimize
management of the Group’s brands in North
America, Schneider Electric Industries SA acquired preferred shares issued by Square D from
Schneider Electric Holdings in an amount of $250 million. Schneider Electric Holdings Inc. holds a call
option on these preferred shares that can be exercised between October 2003 and October 2008.
The minimum exercise price is $250 million and
the maximum exercise price is $516 million.
17. Leases
The Group leases property and equipment under
leases with noncancelable terms in excess of one
year. Rentals payable under these leases are subject to periodic adjustments in accordance with
contractual indexation and escalation clauses.
Minimum lease payments due under noncancelable
leases at December 31, 2000
Year
Finance lease
2001
2002
2003
2004
2005
2006 and beyond
Sub-total
Capitalized interest
Commitments under noncancelable leases
84
4.1
25.2
2.6
2.5
2.1
4.3
40.8
19.6
60.4
2000
Interest income
36.3
Interest expense
(141.5)
Other financial income and expense - net 89.0
Total
(16.2)
1999
40.6
(119.1)
(7.6)
(86.1)
Interest income and expense consist solely of income and expense relating to financial debts and
receivables (including cash and short-term investments). Other financial income and expenses can
be analyzed as follows:
2000
1999
73.9
5.9
(13.4)
9.5
14.5
(5.3)
10.2
(13.9)
89.0
(7.6)
Exchange losses - net
Dividend income
Net gains on sales
of marketable securities
Other
Total
19. Non-recurring items
2000
Net gains on capital transactions
(MGE-UPS Systems)
Provisions for impairment of value
Provisions for charges
Restructuring costs (2)
Other
Total
(1)
37.4
(60.5)
(59.3)
(31.4)
(4.6)
(118.4)
(1) Litigation, claims and the recovery of non-recurring assets
(2) Primarily costs exceeding provisions set aside for restructuring programs in France
and North America.
20. Earnings per share
Primary earnings per share are calculated in accordance with the method set forth in SFAS no. 128.
As indicated in note 12, however, Schneider
Electric SA’s capital stock is subject to dilution.
Fully diluted earnings per share have therefore
been calculated by dividing net income, as adjusted
for remuneration paid on quasi-equity, by the
weighted average number of common shares (less
shares repurchased by the Company) and share
equivalents (represented by convertible bonds, to
the extent that their conversion is probable) outstanding during the year in question. The dilutive
impact of stock options is determined by calculating
the number of shares that could be purchased on
the open market using the funds obtained from the
exercise of the options.
Earnings per share:
(in euros per share)
2000
Primary
Income from continuing operations
Non-recurring items
Income tax
Amortization of goodwill
Net income of fully consolidated companies
Net income (attributable
to Schneider Electric SA)
1999
Diluted
Primary
Diluted
8.58
(0.79)
(2.48)
(0.96)
4.35
8.48
(0.78)
(2.45)
(0.95)
4.30
6.52
(0.23)
(2.14)
(0.82)
3.33
6.45
(0.23)
(2.11)
(0.81)
3.19
4.18
4.13
3.23
3.19
Calculation of adjusted earnings per share:
(in millions of euros)
Unadjusted
Remuneration of quasi-equity, net of tax
Adjusted
2000
1999
Income from
continuing
operations
Net income
attributable to
Schneider
Electric SA
Income from
continuing
operations
Net income
attributable to
to Schneider
Electric SA
1,281.9
0.7
625.0
0.4
970.3
0.8
480.8
0.5
1,282.6
625.4
971.1
481.3
Determination of share base used in calculation:
(in thousands of shares)
Common stock (1)
Convertible bonds, stock options
Share base
2000
Primary
Diluted
1999
Primary
Diluted
149,354
–
149,354
1,883
148,759
–
148,759
1,844
149,354
151,237
148,759
150,603
(1) Less shares held in treasury.
Consolidated Financial Statements
85
Consolidated Financial Statements
21. Geographic and business segment information
a) Breakdown by region:
Sales (in %)
2000
1999
16
33
33
18
18
35
30
17
100
100
Operating margin (in %)
2000
1999
France
Europe outside France
North America
Rest of World
14.5
13.1
14.0
11.9
14.9
12.8
13.8
7.7
13.4
12.6
2000
1999
71
29
71
29
100
100
2000
1999
13.2
13.8
13.1
11.5
13.4
12.6
France
Europe outside France
North America
Rest of World
Total
Average operating margin
Obtained by dividing operating income by sales (average: €1,298.2 million divided by €9,695.5 million = 13.4%).
b) Breakdown by business:
Sales (in %)
Electrical distribution
Industrial control and automation
Total
Operating margin (in %)
Electrical distribution
Industrial control and automation
Average operating margin
86
22. Related party transactions
23. Employees
Significant transactions between Schneider Electric
SA and its subsidiaries are as follows:
I • Provision of services
€ 2.7 million
• Dividends received from
consolidated subsidiaries
€ 314.7 million
• Net interest received on
loans and advances to
consolidated subsidiaries
€ 110.7 million
II • Loan to Boissière Finance,
repayable on demand:
€ 1,524.8 million
Weighted average number
of Group employees
Production
Administrative
Total
France
Outside France
2000
1999
34,332
37,812
31,823
35,687
72,144
67,510
23,152
48,992
22,150
45,360
24. Consolidated companies and equity affiliates
Schneider Electric Industries SA
% interest
Dec. 31,2000
% interest
Dec. 31,1999
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
38.50
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
–
100.00
100.00
100.00
100.00
–
–
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
32.31
–
France
Fully consolidated companies
Schneider Electric SA (parent company)
Schneider Electric Industries SA
Ateliers de Constructions Electriques de Grenoble - ACEG
Auxibati SCI
BCV Technologies
Boissière Finance
Citef SAS
Crouzet Automatismes
Distrelec
Electro Porcelaine
Elkron France
Entreprise Générale d’Installation et de Construction - EGIC
Établissements Bardin
Euromatel
France Transfo
Infra +
Jeumont-Schneider Transformateurs
Le Moule Métallique
Mafelec
Materlignes
Merlin Gerin Alès
Merlin Gerin Alpes
Merlin Gerin Loire
Normabarre
Num SA
Prodipact
Rectiphase
SAE-Gardy
Sarel Appareillage Electrique
Schneider Automation SA
Schneider Electric High Voltage SA - SEHV
SCI du Pré Blanc
Systèmes Equipements Tableaux Basse Tension - SETBT
SIMELECTRO
Société d’Application Électro-Mécanique - SAEM
Société Alpine de Préfabrication Electro-Mécanique - SAPEM
Société Dauphinoise Électrique - SDE
Société Électrique d’Aubenas - SEA
Sté Française de Constructions Mécaniques et Électriques - SFCME
Société Française Gardy SA
Sté Industrielle Financière et Immobilière de Rueil - SIFIR
Sté Rhodanienne d’Études et de Participations - SREP
Sorhodel
Spring SA
Transfo Services
Usibati SCI
Companies accounted for by the equity method
MGE-UPS Systems
Consolidated Financial Statements
87
Consolidated Financial Statements
% interest
Dec. 31,2000
% interest
Dec. 31,1999
100.00
100.00
100.00
99.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
98.27
100.00
100.00
100.00
–
100.00
99.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
100.00
100.00
98.27
100.00
100.00
Europe outside France
Fully consolidated companies
Bub GmbH (Germany)
May Steffens (Germany)
Num Guttinger GmbH (Germany)
Sarel GmbH (Germany)
Schneider Electric GmbH (Germany)
Schneider Factoring GmbH (Germany)
Schneider Automation GmbH (Germany)
Schneider Electric Austria GmbH (Austria)
Schneider Electric NV/SA (Belgium)
Schneider Electric Bulgaria (Bulgaria)
Schneider Electric Ltd (Croatia)
Schneider Electric AS Denmark (Denmark)
EFI Electronics Europe SL (Spain)
Himel SA (Spain)
Schneider Electric Espana (Spain)
Mesa SA (Spain)
Telenum (Spain)
Schneider Electric Oy (Finland)
Capacitors Ltd (United Kingdom)
Sarel Ltd (United Kingdom)
Ajax Electrical Ltd (United Kingdom)
Num UK (United Kingdom)
Schneider Electric (UK) Ltd (United Kingdom)
Schneider Ltd (United Kingdom)
Yorshire Switchgear Group Ltd (United Kingdom)
Westinghouse Systems (United Kingdom)
Schneider Electric AE (Greece)
Schneider Electric Hungeria Villamassagi RT (Hungary)
Merlin Gerin Zala (Hungary)
Schneider Electric Ireland Ltd (Ireland)
Square D Ireland (Ireland)
Schneider Electric Manufacturing Celbridge (Ireland)
Coelme SPA (Italy)
Schneider Italia SPA (Italy)
Num SPA (Italy)
Nuova Magrini Galileo SPA (Italy)
Nuova Magrini Meridionale SPA (Italy)
SAIP SRL (Italy)
Schyller SRL (Italy)
Stem Trento SPA (Italy)
Schneider Italie SPA (Italy)
Square D Company Italia SPA (Italy)
Vanossi Sud SPA (Italy)
Schneider Electric Norge A/S (Norway)
Schneider Logistics BV (Netherlands)
Schneider Electric BV (Netherlands)
Schneider Electric Polska SP (Poland)
Schneider Electric Bukowno (Poland)
Schneider Electric Portugal LDA (Portugal)
Schneider Electric Romania SRL (Romania)
Schneider Electric AS (Czech Republic)
Schneider Electric SRO (Czech Republic)
ZAO Schneider Electric (Russia)
88
Schneider Electric Slovakia Spol SRO (Slovakia)
Schneider Electric Ltd (Slovenia)
Delta Elektriska AB (Sweden)
KL Industri AB (Sweden)
Num Norden (Sweden)
Schneider Electric AB (Sweden)
Feller AG (Switzerland)
Schneider Electric Finances (formerly-GMGH SA) (Switzerland)
Num Guttinger AG (Switzerland)
Schneider Electric Suisse AG (Switzerland)
Schneider Electric Ukraine (Ukraine)
% interest
Dec. 31,2000
% interest
Dec. 31,1999
100.00
100.00
100.00
100.00
100.00
100.00
83.70
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
100.00
83.70
100.00
100.00
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
80.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
80.00
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
49.00
49.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
95.00
95.00
100.00
75.00
100.00
80.00
60.00
80.00
100.00
48.94
60.00
99.00
–
94.22
88.19
49.00
49.00
100.00
100.00
–
100.00
–
100.00
100.00
95.00
95.00
100.00
–
100.00
80.00
60.00
80.00
100.00
48.94
60.00
99.00
North America
Fully consolidated companies
Schneider Canada Inc. (Canada)
Industrias Electronias Pacifico SA de CV (Mexico)
Schneider Electric Mexico SA de CV (Mexico)
Square D Company Mexico SA de CV (Mexico)
EFI Electronics Inc (United States)
Num Corporation (United States)
Palatine Hills Leasing Inc. (United States)
Power Distribution Services Inc.(United States)
Quantronix Inc (United States)
Schneider Automation Inc. (United States)
Schneider Electric Holdings Inc. (United States)
SNA Holdings Inc.(United States)
Square D Company (United States)
Square D Investments Company (United States)
Veris Industries LLC (United States)
Rest of World
Fully consolidated companies
Merlin Gerin South Africa (Pty) Ltd (Conlog business) (South Africa)
Schneider Automation Pty Ltd (South Africa)
Schneider Electric South Africa Pty Ltd (South Africa)
EPS Ltd (Saudi Arabia)
Meepco (Saudi Arabia)
Schneider Electric Argentina (Argentina)
Plasnavi SA (Argentina)
Nu-Lec Industries Pty Ltd (Australia)
Schneider Electric Australia Pty Ltd (Australia)
Primelectrica (Brazil)
Schneider Electric Brasil LTDA (Brazil)
Schneider Electric Alta Tensao LTDA (Brazil)
Schneider Beijing Low Voltage (China)
Schneider Beijing Medium Voltage (China)
Schneider Electric China Invest Co Ltd (China)
Schneider Electric Low Voltage (Tianjin) Cy Ltd (China)
Schneider Electric Supply Beijing Co Ltd (China)
Schneider Shanghaï Power Distribution Electric App. (China)
Schneider Shanghaï Low Voltage Term. Apparatus (China)
Schneider Shanghaï Industrial Control (China)
Schneider Shanghaï Supply Components Ltd (China)
Schneider Swire Guangzhou Electrical Equipment Ltd (China)
Tianjin Merlin Gerin Co Ltd (China)
Schneider Electric Chile SA (Chile)
Consolidated Financial Statements
89
Consolidated Financial Statements
Schneider de Colombia SA (Colombia)
SEP Le Guavio (Colombia)
Schneider Electric Korea Ltd (South Korea)
Schneider Centroamerica SA (ex Square D Centroamerica SA) (Costa Rica)
Schneider Electric Egypt SA (Egypt)
Schneider Electric High Voltage SAE (Egypt)
Schneider Electric FZE (United Arab Emirates)
Schneider Electric Hong Kong Ltd (Hong Kong)
Schneider Swire Ltd (Hong Kong)
Schneider Electric India Private Ltd (India)
PT Schneider Electric Indonésia (Indonesia)
Schneider Electric Manufacturing Batam (Indonesia)
Telemecanique Iran (Iran)
Schneider Electric Japan Ltd (Japan)
Toshiba Schneider Electric Ltd (Japan)
Schneider Electric Maroc (Morocco)
Schneider Electric (NZ) Ltd (New Zealand)
Schneider Electric Peru SA (Peru)
Schneider Electric Philippines Inc (Philippines)
Schneider Electric Export Services (Singapore)
Schneider Electric Logistic Asia Pte Ltd (Singapore)
Schneider Electric Industrial Development Singapore Pte Ltd (Singapore)
Schneider Electric Overseas Asia Pte Ltd (Singapore)
Schneider Electric Singapore Pte Ltd (Singapore)
Schneider Electric South East Asia (HQ) Pte Ltd (Singapore)
Schneider Electric Taïwan Co Ltd (Taiwan)
Schneider Electric Thaïland Co Ltd (Thailand)
Schneider Electric High Voltage Thaïland Ltd (Thailand)
Schneider Thaïland Ltd (Thailand)
Square D Company Thaïland Ltd (Thailand)
Schneider Elektrik AS (Turkey)
Schneider Electric Venezuela SA (ex - Schneider MG SD TE SA) (Venezuela)
Schneider Electric Vietnam Ltd (Vietnam)
% interest
Dec. 31,2000
% interest
Dec. 31,1999
79.98
100.00
100.00
100.00
81.00
100.00
100.00
100.00
51.00
100.00
100.00
80.00
100.00
100.00
60.00
100.00
100.00
60.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
91.58
100.00
79.98
100.00
100.00
100.00
80.80
100.00
–
100.00
51.00
100.00
51.00
80.00
100.00
100.00
60.00
100.00
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
94.88
100.00
100.00
100.00
100.00
91.58
100.00
30.00
14.70
30.00
14.70
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Fusion
100.00
100.00
100.00
100.00
100.00
–
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Companies accounted for by the equity method
Schneider Electric Malaysia SDN BHD (Malaysia)
Schneider Scott & English Electric SDN BHD (Malaysia)
Groupe Lexel A/S
ELSO GmbH Elektrotechnik (Germany)
LK Elektrotechnik GmbH (Germany)
Thorsman GmbH (Germany)
Dalcotech A/S (Denmark)
Elmat ApS (Denmark)
JO-EL A/S (Denmark)
JO JO A/S ((Denmark)
Lexel A/S (Denmark)
Lexel Electric A/S (ex Thorsman & Co A/S) (Denmark)
Lexel Holding A/S (Denmark)
Lexinvest A/S (Denmark)
LK A/S (Denmark)
LK Engineering A/S (Denmark)
Polam Holding Danmark A/S (Denmark)
Wibe A/S (Denmark)
A/S Lexel Electric (Estonia)
Elari Oy (Finland)
90
Elko Suomi Oy (Finland)
I-Valo (Finland)
JO-EL Oy (Finland)
Oy Elektrokontakt (Finland)
Oy Esmi AB (Finland)
Oy Lexel Electric AB (ex Ahlström Sähkotarvikeet Oy) (Finland)
Oy Lexel Finland AB (Finland)
Oy Thorsman & Co AB (Finland)
Oy Wibe AB (Finland)
Alombard Finance SA (France)
Ets Alombard SA (France)
Scanelec SA (France)
Thorsman Ltd (ex Foxford Eurofast Ltd) (United Kingdom)
Grawater of Wakefield Ltd (United Kingdom)
Grawater Ltd (United Kingdom)
JO JO Products Ltd (United Kingdom)
JO JO (UK) Ltd (United Kingdom)
Lexel Holdings Ltd (United Kingdom)
MITA Holdings Ltd (United Kingdom)
MITA (UK) Ltd (United Kingdom)
Thorsman & Co (UK) Ltd (United Kingdom)
Walker Mainstay Ltd (United Kingdom)
LK India Private Ltd (India)
Thorsman Ireland Ltd (Ireland)
Thorsman Sales Ireland Ltd (Ireland)
Ahlstrom - Remlr Elektra SIA (Latvia)
Lexel Elektropreces SIA (Latvia)
Eltra Baltic UAB (Lithuania)
UAB Lexel Electric (Lithuania)
Elektrokontakt A/S (Norway)
Elko Holding AS (Norway)
ESMI AS (Norway)
Industrisitering A/S (Norway)
Lexel Electric A/S (ex - Thorsman & Co A/S) (Norway)
Norwesco AS (Norway)
Telesafe Produkter AS (Norway)
Wibe Stiger A/S (ex Wibe A/S) (Norway)
Polam Holding BV (Netherlands)
Polinsta Holding B.V.(Netherlands)
Sandas Montage BV (Netherlands)
Stago BV (Netherlands)
Stago Production BV (Netherlands)
Stago Thorsman BV (Netherlands)
Aktywa Sp.zo.o (Poland)
B.A.P.Z. Sp.zo.o (Poland)
ELDA Szczecinek SA (Poland)
El. Grand Sp.zo.o (Poland)
El-Handel Sp.zo.o (Poland)
Eltra S.A. (Poland)
NEW.CO Poland (Poland)
Wibe Polska S.z.p.o.o (ex - Thorsman Polska S.z.p.o.o) (Poland)
Lexel Amperie (Czech Republic)
Eltra Kaliningrad Sp.zo.o (Russia)
ZAO Lexel Elektromaterialy (SPB) (Russia)
ZAO Ahlstrom Elektromaterialy (Russia)
% interest
Dec. 31,2000
% interest
Dec. 31,1999
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Fusion
Liquidation
99.99
99.88
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Liquidation
100.00
77.01
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
100.00
100.00
100.00
Liquidation
100.00
51.00
100.00
100.00
100.00
–
–
–
–
100.00
100.00
100.00
100.00
100.00
99.99
99.88
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
77.01
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
Consolidated Financial Statements
91
Consolidated Financial Statements
ZAO Ahlstrom Elektromaterialy (MOW) (Russia)
EFAB Electric AB (Sweden)
AB Stockholms Brandskyddskonsulenter (Sweden)
AB Elektrokontakt EKT (Sweden)
ELJO AB (Sweden)
ELJO Forsäljning AB (Sweden)
Exportvärden AB (Sweden)
Hebo-Verken AB (Sweden)
JO-EL AB (Sweden)
JO JO AB ((Sweden)
Lexel AB (ex - Elmerks AB) (Sweden)
Lexel Elektrik AB (ex - Thorsman Marknad Sverige AB) (Sweden)
ESMI AB (Sweden)
ESMI Multi Signal AB (ex - Multi Signal AB) (Sweden)
Multi Signal Service AB (Sweden)
Scanmast International AB (Sweden)
Thorsman & Co AB (Sweden)
Thorsman Industri AB (Sweden)
Thorsman Växjö AB (Sweden)
AB Wibe (Sweden)
Wibe Holding AB (Sweden)
Wibe Stegar AB (Sweden)
Wibe Stegar Holding AB (Sweden)
Metesan Lexel Elektrik Malzemeleri Sanayi Ve Ticaret AS (Turkey)
% interest
Dec. 31,2000
% interest
Dec. 31,1999
100.00
100.00
Liquidation
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Fusion
100.00
100.00
Liquidation
Fusion
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.50
99.76
99.76
99.76
100.00
100.00
100.00
100.00
Schneider Electric SA (parent company)
Former Empain Schneider
Fully consolidated companies
Muller & Cie
Sovalmo
Cofibel
COFIMINES
Cofimines Overseas Corporation
SHL
Former Spie Batignolles
Fully consolidated companies
Spie-Capag
SPEI
92
Summary Financial Statements of Schneider Electric SA
Summary Financial
Statements
of Schneider Electric SA
Only the consolidated financial statements provide
a full picture of the Company’s activities and
results and express its financial and economic
reality. The financial statements of the Schneider
Electric SA parent company present only a very
partial image of this same reality.
The net income submitted for approval at the
Annual Shareholders’ Meeting is the net income
reported by the parent company. Based on this
figure, plus any retained earnings and other
reserves carried over from the previous year,
shareholders then approve the dividend to be paid
for the year.
Balance Sheet at December 31, 2000
Assets
(in millions of euros)
2000
1999
1998
Non-current assets
Other assets
3,370
1,739
3,125
1,888
2,203
1,276
5,109
5,013
3,479
(in millions of euros)
2000
1999
1998
Shareholders’ equity
Provisions
Debt
Other liabilities
3,157
44
1,779
129
3,332
49
1,539
93
2,877
52
465
85
5,109
5,013
3,479
2000
1999
1998
Total Assets
Liabilities and Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
Statement of Income at December 31, 2000
(in millions of euros)
Net revenue from investments
Interest income - net
Operating expenses
Non-recurring items and income tax
Net income for the year
318
49
(9)
(1)
251
12
(14)
68
212
25
(20)
(30)
357
317
187
Summary Financial Statements of Schneider Electric SA
93
Summary Financial Statements of Schneider Electric SA
Subsidiaries and Affiliates
Balance Sheets at December 31, 2000
(in thousands of euros, except where indicated otherwise)
Capital
Reserves
and retained
earnings before
appropriation of
income
for the year*
% interest
Schneider Electric Industries SA
89, boulevard Franklin Roosevelt
92500 Rueil-Malmaison
441,314.3
1,486,931.8
100.00
Cofibel
18-20, avenue Winston Churchill
1180 Bruxelles
BEF 2,233,306
BEF 3,487,587
99.54
Cofimines
18-20, avenue Winston Churchill
1180 Bruxelles
BEF 1,675,000
BEF 1,010,581
99.77
2,038.2
7,934.1
38.50
I. Subsidiaries and affiliates whose book value exceeds 1%
of Schneider Electric SA’s capital
A. Subsidiaries (at least 50% owned)
B. Affiliates (10 to 50% owned)
Infra +
3, rue des Marronniers
94240 L’Haÿ-les-Roses
II. Other subsidiaries and affiliates
A. Other subsidiaries:
a) French subsidiaries (aggregate)
b) International subsidiaries (aggregate)
B. Other affiliates:
a) French companies (aggregate)
b) International companies (aggregate)
*
94
Including prior-year income or loss.
Book value
of shares
Cost
Loans and
advances
Guarantees
Net sales
for the year
Income or
loss for the
year
Net
Dividends
received
by the
Company
for the year
Observations
see note on
investments
1,531,980.7 1,531,980.7
–
–
3,116,530.3
503,554.3
292,262.4
136,762.7
136,762.7
–
–
Holding
company BEF 183,667.6
18,946.4
82,579.7
82,579.7
–
–
Holding
company BEF 57,847.4
–
23,632.7
23,632.7
20,966
20,962
–
–
2,576.7
1,530.5
877.8
498.1
24,958.0
–
–
1,668.7
303.4
–
2,337.3
–
14.8
–
399.5
–
–
Summary Financial Statements of Schneider Electric SA
95
Summary Financial Statements of Schneider Electric SA
Five-Year Financial Summary
1996
1997
1998
1999
2000
1,043,682.4
136,922,169
1,159,893.8
152,168,097
1,169,414.4
153,417,118
1,230,443.3
161,423,578
1,246,301.1
155,787,643
2,521
1,566
1,315
1
–
12,597
14,497
8,682
4,767
7,668
4,281
343
3,512
191
3,261
17,095.0
11,946.4
3,946.1
3,865.3
2,728.5
198,757.1
246,491.9
264,164.6
312,575.4
443,613.6
153,685.8
–
114,323.5
104,368.3
184,350.8
–
120,035.0
150,025.8
106,320.8
15.2
187,043.9
168,429.7
255,739.0
3.8
316,704.3
270,272.7
301,958.6
–
356,657.1
249,260.2
Net income before depreciation,
amortization and provisions
1.12
1.66
0.94
1.40
1.94
Earnings per share
0.84
0.79
1.22
1.96
2.29
Dividend per share, net of tax credit
0.76
0.99
1.15
1.34
1.60
12
9
8
6
3,578.6
3,128.6
3,198.2
3,975.9
1,291.5
1,699.3
1,736.8
901.7
Capital and Potential Capital at December 31
Capital stock
(in thousands of euros)
Shares in issue
Convertible bonds in issue
(in thousands)
Maximum number of shares to
be created (in thousands):
•Through conversion of bonds
•Through exercise of rights
Results of Operations
(in thousands of euros)
Sales net of VAT
Investment revenue,
interest income and other revenue
Income before tax, depreciation,
amortization and provisions
Income tax (IFA)
Net income
Dividends paid
(1)
Per Share Data (in euros)
Employees
Average number of
employees during the year
12
Total payroll for the year
(in thousands of euros)
3,157.7
Total employee benefits paid over the year
(payroll taxes, other benefits)
(in thousands of euros)
1,353.6
(1) Dividends paid to shares held in treasury on the dividend payment date and the associated withholding tax are credited to retained earnings.
96
Auditors’ Report on the Consolidated Financial Statements
Auditors’ Report on the
Consolidated Financial
Statements
Year ended December 31, 2000
To the Shareholders of Schneider Electric SA,
In accordance with the terms of our appointment at
the Annual Shareholders’ Meeting, we have examined the consolidated financial statements of
Schneider Electric SA and its subsidiaries established
in euros for the year ended December 31, 2000.
These financial statements are the responsibility of
the Board of Directors. Our responsibility is to
express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with
French generally accepted auditing standards.
Those standards require that we plan and perform
our audit to obtain reasonable assurance that the
financial statements are free from material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used
and significant estimates made in the preparation
of the financial statements, as well as evaluating
the overall financial statement presentation. We
believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated
results of operations for the year ended December 31,
2000 and the consolidated assets and liabilities and
financial position of Schneider Electric SA and its
subsidiaries at that date.
Without qualifying the opinion expressed above, we
wish to draw your attention to note 1 to the consolidated financial statements describing the change in
accounting method resulting from the application,
effective January 1, 2000, of French Accounting
Standards Board (CRC) standard 99-02 concerning
consolidated accounts.
We are satisfied that the information given in the
report of the Board of Directors concerning the
Group is fairly stated and agrees with the
consolidated financial statements.
Neuilly-sur-Seine and Paris-La Défense, March 1, 2001
The Statutory Auditors
Barbier Frinault & Autres
Arthur Andersen
Aldo Cardoso
Pierre Jouanne
Befec-Price Waterhouse
Member of PricewaterhouseCoopers
Pascale Chastaing-Doblin
Daniel Chauveau
Auditors’ Report on the Consolidated Financial Statements
97
Person in charge of the Reference Document
Person in charge of examining the Accounts
Certificate from the person in charge of the Reference Document
To the best of our knowledge, the data in this reference document are compliant with real facts, they
include all information required for the investors to found their judgement on the assets, the activity,
the financial situation, the results and the outlook for Schneider Electric S.A. Nothing is omitted, which
might modify their scope.
Rueil-Malmaison, April 12, 2001
The Chairman and Chief Executive Officer
Henri Lachmann
Auditors’ opinion on the Reference Document
In our capacity as auditors for Schneider Electric S.A., and in compliance with COB rule 98-01, we
have proceeded in compliance with professional standards applicable in France, with the verification of
information items concerning the financial situation and the historic accounts submitted in this reference
document.
This reference document has been established under the responsibility of the Chairman of the Board of
Directors. It is our role to issue an opinion on the sincere nature of information contained therein,
concerning the financial situation and the accounts.
Our diligence has consisted, in compliance with professional standards applicable in France, in appreciating
the sincerity of the information concerning the financial situation and the accounts, in verifying their
conformity with the accounts, which had been the subject of a report. It has also consisted in reading the
other information contained in the reference document, with the purpose of identifying, as the case may
be, any significant inconsistencies relative to the information concerning the financial situation and the
accounts, and in pointing out clearly erroneous information which we could have noted on the basis of
our general knowledge of the Company, as acquired within the framework of our assignment. Concerning
isolated forecasting data resulting from a structured elaboration process, this reading has taken into account
the assumptions retained by the Chief Executive, as well as their translation into figures, it being observed
that the synergies as estimated on the basis of the results, following the projected merger between Schneider
Electric S.A. and Legrand, represent objectives in the meaning of the standards of this profession and have
not been subjected to diligence on our part other than the specific work performed in the course of the
public offer, and which formed the object of our report dated January 29, 2001.
The annual accounts for 1998, 1999 and 2000 as well as the consolidated accounts for 1998 and 1999,
have been the object of an audit conducted by ourselves, in compliance with professional standards
applicable in France and have been certified without reservations or remarks.
The consolidated accounts for 2000 have been the object of an audit by ourselves, according to the
professional standards applicable in France, and have been certified without reservations.
Our report on the consolidated accounts for 2000, dated March 1, 2001, includes a remark recalling the
modifications in the accountancy method resulting from the application – as of January 1, 2000 - of the
new ruling laid down by the Accounting Standards Board, relating to consolidated accounts.
On the basis of these diligences, we have no remarks to formulate concerning the sincerity of the information
items concerning the financial situation and the accounts as introduced in this reference document.
Neuilly-sur-Seine and Paris-la-Défense, April 17, 2001
The Auditors
Barbier Frinault et al.
Arthur Andersen
Aldo Cardoso
98
Pierre Jouanne
Befec-Price Waterhouse
Member of PricewaterhouseCoopers
Pascale Chastaing-Doblin
Daniel Chauveau
Combined Annual and
Extraordinary Shareholders’
Meeting
on June 11, 2001
Report of the Board of Directors .......................................................................................................................................... 100
Auditors’ Special Reports
Resolutions
............................................................................................................................................................
105
..................................................................................................................................................................................................
106
Report of the Board of Directors to the General Shareholders Meeting
99
Report of the Board of Directors to the Annual Shareholders’ Meeting
Report of the Board
of Directors
to the Annual Shareholders’ Meeting
Approval of annual accounts
- First Resolution –
We ask you to approve the transactions and
accounts for the year, such as they have been
introduced.
2. the unpaid dividend on the treasury shares, for an
amount of € 7,951,316.12, which will raise retained
earnings to € 185,965,775.99, for a total amount
payable
in
the
form
of
dividends
of
€ 542,622,870.14 in the following manner:
€249 260 228,80
Dividends to shares
Appropriation to legal reserves
- Second Resolution We are proposing to collect from the “merger
premium” a sum of € 6,385,785.28 in order to raise
the legal reserve to an amount equal to 10% of the
new capital as of December 31, 2001.
Integration within the premiums
- Third Resolution It is proposed to the annual meeting to approve
the appropriation of an amount of € 7,962,383.66
in the form of a share premium.
We would remind you that, in 1992, when Square
D floated a loan of $250 million, convertible into
Schneider S.A. stock, it paid to Schneider S.A. an
amount of € 7,962,383.66 intended to cover the risk
of non-payment of the nominal amount representing the Schneider shares to be issued following the
exercise by the bearers of Square D bonds of their
conversion rights, this risk being related to possible
currency fluctuations between the dollar and the
French franc. This sum can also be considered in
the form of a premium intended to remunerate the
issuing of shares resulting from the exchange of
convertible bonds. This sum does not represent an
item out of corporate income, it is thus proposed
that you directly appropriate it to the stock
premium.
Appropriation of income and fixing
of dividend at € 1.6
- Fourth Resolution We propose to distribute the income for the year, for
€ 356,657,094.42, increased by retained earnings
from the previous year, for € 173,292,909.68, to
which it is proposed that you will add:
1. the share of the corporate dividend withholding
tax, which did not have to be paid to the Treasury,
for an amount of € 4,721,550.19,
100
€61 610 598,41
Corporate dividend withholding tax
€231 752 043,20
Retained earnings
After this appropriation, Schneider Electric S.A.’s
equity will amount, given the 6 million shares cancelled by the Annual General Meeting on May 5,
2000, to € 2.85 billion against € 3.06 billion (after
distribution) on December 31, 1999.
If you approve this appropriation, the net dividend allocated against shares entitled to said dividend for 2000 would be € 1.6 (FF 10.50), or,
after adding a tax credit of 50%, total income of
€ 2.4, or FF 15.74, which will correspond to the
advance payment on the dividend, which was paid
up on May 7, 2001.
We remind you that the dividends paid by
Schneider Electric S.A., in the last three years,
were as follows.
Net
dividend
Tax
credit
Total
Income
€
FRF
€
FRF
€
FRF
1997
0.99
6.50
0.50
3.25
1.49
9.75
1998
1.15
7.54
0.58
3.77
1.73
11.31
1999
1.34
8.79
0.67
4.39
2.01
13.18
Composition of the Board of Directors
- Fifth to Seventh Resolutions The biographies for Didier Pineau-Valencienne,
Jean-René Fourtou and Dr Hans Friderichs are submitted for your attention within the presentation of
the Board of Directors.
Fixing of the amount for Directors’ fees
- Eighth Resolution To enable the continuation of the internationalization of your Board of Directors, it is proposed to
raise the annual amount of the Directors’ fees to
€ 640,000.
On this basis, the fees paid to a Director, excluding
such Directors’ fees as are paid to compensate the
fact of belonging to a Committee on the Board, could
amount to € 30,500.
It is recalled that one half of the Directors’ fees is
dependent on their taking part in the meetings of the
Board of Directors.
We indicate for your attention that if you decide, as
is proposed under the sixteenth resolution, to transform the Company’s corporate governance through
the adoption of an Executive Board and a Supervisory
Board, the total amount for the Directors’ fees paid
to the Board of Directors will be paid, for the financial year 2001, pro rata temporis.
Agreements from Article L 225-38
- Ninth Resolution No new agreement, referred to under articles L
225-38 et al. in the Commercial Code, has been
concluded in the course of the year.
You are requested to note the continuation, in the
course of the year, of such agreements under
Article L 225-38 as are included under the heading of previous years.
Stock buy-back
- Tenth Resolution It is proposed to allow the Company to buy back
its own stock, by any means, including the use of
derivative products, in compliance with the dispositions of Article L 225-209 in the Commercial
Code.
The purchasing program which the Company could
realize will have different purposes: this could
involve transactions to stabilize the price of the
stock, or the stock could be bought back with the
purpose of reducing dilution or of optimizing the
management of funds belonging to the Company.
The shares bought back can be transferred, in
compliance with standing law, by any means; their
transfer could thus intervene in parallel with, or
instead of, an increase in capital, especially if an
external growth opportunity should arise.
They may also be used to assist the stock options
program or the employee stock-owner program,
which your Company could implement.
And finally, it will be possible to cancel them in part
in compliance with the fourteenth resolution of the
Annual Shareholders’ Meeting of May 5, 2000.
The authorization which you granted in 2000 has
been borne out in fact; a report on this point is
provided on page 52 of the Annual Report.
In compliance with ruling 98-02 of the
Commission des Opérations de Bourse the
Company has established and published an information note, approved by the Commission,
which is available on request.
Delegation for the issuing of bonds
- Eleventh Resolution In the course of the year, Schneider Electric S.A.
issued in October 2000 seven-year bonds for
€ 450 million. These bonds, which offer a 6.125%
coupon, were privately placed with international
investors. They are listed in Paris and in
Luxemburg.
Your Board having made use of the authorization
which you had granted in May 1999 and in October
2000, it is proposed that you grant a new authorization to issue bonds or similar securities, both in
France and abroad, up to a nominal amount of € 2.5
billion.
This authorization, in compliance with standing
law, will be valid for five years.
Authorizations to increase the capital immediately
or in time
- Twelfth to Fourteenth Resolutions We are submitting for your attention resolutions concerning the renewal of delegations granted to the
Board of Directors to increase the capital.
We would remind you that the Board of Directors benefits from authorizations to issue, with or without preferential subscription rights for the shareholders, in
particular shares, shares with warrants, convertible
bonds or stock warrants within the limit of € 750 million at nominal stock value.
Your Board of Directors has utilized one of these
authorizations to remunerate Legrand’s shareholders,
who will be tendering their Shares to the public offer
which Schneider Electric S.A. initiated concerning
said company on January 15, 2001.
Further, these authorizations will terminate in the
course of this meeting for any amounts which have
not been used.
We are proposing, in compliance with the dispositions of Article L 225-129 III of the Commercial
Code, to renew same, within the framework of two
delegations given to the Board of Directors to issue,
as the case may be, all kinds of investment securities
giving access immediately or in time to the capital,
one of said delegations involving the retention of the
preferential subscription right, the other one with the
cancellation of said right.
The term of validity of these two delegations will, in
compliance with legal dispositions, be of 26 months.
Thus under the twelfth resolution, it is proposed that
you authorize the Board of Directors to issue, whilst
retaining the preferential subscription right for the
shareholders, shares, warrants, as well as any other
various investment securities providing, as the case
may be, access to the capital (such as for instance:
convertible bonds or bonds refundable in the form
of shares, bonds with warrants) as well as increasing
the capital through the incorporation of reserves,
profits or share premiums.
Report of the Board of Directors to the Annual Shareholders’ Meeting
101
Report of the Board of Directors to the Annual Shareholders’ Meeting
The maximum nominal amount for the investment
securities which would thus be issued being of
€ 1.5 billion, the maximum nominal amount for the
increases in capital resulting therefrom would be
restricted, excluding the incorporation of reserves,
up to the ceiling amount of € 750 million. This last
mentioned amount is fixed subject, as the case may
be, to increases in capital resulting from incorporations of reserves, profits or premiums, as well as to
the rights of some bearers of capital stock in the
event of the issuing of new securities. It is also indicated that against this amount will be charged the
increases in capital realized under the renunciation
by shareholders to their preferential subscription
right.
In the thirteenth resolution, it is also proposed that
you grant the Board of Directors the power to proceed, as the case may be, both on the French market and on the international market, with the
issuing of the same securities as those concerned
under the previous resolution. Your Board of
Directors will further be entitled to issue investment securities with the purpose of remunerating
those securities which would be delivered to the
Company within the framework of a public offer
which it would have initiated. In the same manner, your Board will be entitled to issue shares,
entitlement to which would be provided by
investment securities which would be issued by
direct or indirect subsidiaries of Schneider Electric
S.A., in agreement with your Board of Directors.
The maximum nominal amounts for the issues of
investment securities giving access to capital and
of therefrom resulting increases in capital, are the
same, within the framework of this resolution, as
those proposed within the previous resolution and
will, as the case may be, be charged to these
amounts. With these financial authorizations, your
Board of Directors will enjoy a high level of flexibility in the selection of issues which may be
envisaged and will be in a position to adapt the
nature of the investment securities to be issued relative to demand and to the state of the French,
foreign or international financial markets. Thus,
the capacity to issue securities without preferential subscription rights will give your Board of
Directors the possibility to perform transactions
where speed is of the essence and which will, further, offer the advantage of calling upon a new
source of public savings by issuing on the foreign
or international markets.
However, in the event of the cancellation of the preferential subscription right, it is provided that your
Board of Directors will be able to give the shareholders a priority subscription right which will not
lead to the creation of negotiable and transferable
rights, and that the shares will be issued on the basis
of the average initial prices listed for the old stock in
the course of 10 consecutive trading days selected
102
from the 20 days prior to the date of the meeting of
the Board which would decide on the issuing of said
securities.
In the event of the issuing of investment securities
other than shares, the terms of the granting of the
shares to which these securities would provide entitlement, as well as the dates upon which the attribution rights could be exercised, will be
determined by your Board at the point in time
when said issues are decided.
We would remind you that your Board of Directors
has been authorized to increase the capital for the
benefit of employees who are members of the corporate savings plan and that it intends to exercise
said authorisation for the realisation of a new worldwide employee/shareowner program in 2001.
Under the effect of the fourteenth resolution, you
are asked to authorize the Board of Directors to
use the delegations granted under the twelfth and
thirteenth resolutions to increase the capital in the
event of a public purchase or exchange offer concerning the Company’s stock.
Modifications of the By-laws,
appointment of the members of the
Supervisory Board, delegations
granted to the Executive Board
- Fifteenth to Thirty-fifth Resolutions We remind you that, within the framework of the
corporate governance agreements concluded in
the course of the public stock exchange offer for
Legrand, it is provided that the Annual
Shareholders’ Meeting of Schneider Electric S.A.
will be consulted for the purpose of modifying the
Company name and Governance System.
Thus, to recognize the creation of a world-wide
leader in electrical distribution, out of the merging
of two major groups, we propose to adopt the new
name of Schneider-Legrand.
Further, to adapt corporate governance both to
the Group’s new size and to the widening of its
activities, we propose to adopt the structure of a
Société Anonyme, with an Executive Board and a
Supervisory Board.
In the by-laws as submitted for your approval, the
Executive Board (articles 16 to 21) comprises two
to seven members appointed for a term of four
years. The first Executive Board will, however, be
appointed for a duration of two years. The age limit
for the members of the Executive Board is 68.
The Executive Board is invested with the most
extensive powers to act under any circumstance in
the name of the Company, within the limits of the
purpose of the Company and subject to those
powers expressly granted under standing law to
the Shareholder Meetings and to the Supervisory
Board.
The Supervisory Board (articles 11 to 15 and 21)
comprises no more than 18 members, all of these
being living persons, who must own at least 250
shares of corporate stock throughout the duration
of their mandate, which is of four years renewable.
The age limit for the members of the Supervisory
Board is 74, and the number of members in the
Supervisory Board who are over 70 cannot exceed
one third of the total number of members of said
Board.
The Supervisory Board, which can designate among
its members one or several specialized committees,
exercises permanent control over the management
of the Company as performed by the Executive
Board, which it appoints, while it performs all verifications and inspections which it considers to be
appropriate and obtains all the documents which it
deems to be necessary for the accomplishment of its
assignment. In compliance with standing legal
dispositions, it authorizes agreements which are
subject to regulations, as well as the transfers of
buildings or shareholdings and the delivery of
guarantees, pledges, securities, under the terms
provided under standing law. It produces, in the
course of the Annual Meeting, a report on the
management performed by the Executive Board
and on the accounts for the year.
It is also proposed, on the occasion of this change
in the by-laws, that you include before the limit
date such new legal dispositions as would be
required to allow people to take part in all corporate governance meetings by video conference, or
by all remote transmission means, to extend the
purpose of the Company, especially to electrical
equipment activities, and to substitute references
made in the by-laws to the Companies Act, to references concerning corresponding items in the
new Commercial Code.
To take account of the increasing globalization of
the share ownership of your Company and of the
very strong reluctance displayed (especially by
British and American investors) concerning double voting rights, it is proposed to cancel same.
Your decision is subject to approval by the special
meeting of stockholders benefiting from double
voting rights.
However, the Schneider-Legrand merger will only
become effective when the two hereinafter mentioned conditions have been satisfied: the success of
the public exchange offer in progress at the point
in time when your Board decided on the resolution
submitted for your approval, and the delivery by
the Brussels Commission of its authorization under
the heading of its control over community concentrations. This last mentioned authorization should
be issued no later than early August 2001.
Thus it is provided that the change in the
Company name, in corporate governance and the
cancellation of double voting rights will come into
effect within the 45 days following the date upon
which these two conditions are raised.
If, according to these recommendations, you approve
the change in the Company by-laws, your Board proposes – under resolutions eighteen to thirty two – the
appointment, in compliance with the conclusions of
the Remunerations and Appointments Committee, as
of the date of the change in corporate governance, of
Daniel Bouton, Thierry Breton, Alain Burg, Bernard
Decoster, Jean-René Fourtou, Michel FrançoisPoncet, Dr Hans Friderichs, James Hardymon,
Gérard de La Martinière, Didier PineauValencienne, James Ross, Edouard de Royère,
Piero
Sierra,
Jean-Pierre
Verspieren
and
Raphaël Verspieren as members of the Supervisory
Board for a period of four years.
The biographical notes concerning the candidates
to the Supervisory Board are submitted, as far as
concerns the present members of the Board of
Directors of Schneider Electric S.A., within the
presentation of the Board of Directors and you
will hereinafter find those concerning Messrs
Bernard Decoster, Edouard de Royère, JeanPierre Verspieren and Raphaël Verspieren.
Bernard Decoster
57, Vice-Chairman of Legrand S.A.
Bernard Decoster joined Legrand in 1967, was
appointed Industrial Manager in April 1982,
became Vice-Chairman of Legrand in 1994.
Bernard Decoster is also Chairman and a Director
of different subsidiaries of Legrand.
Edouard de Royère
69, Honorary Chairman and Director of Air
Liquide S.A.
With a diploma of the Ecole Supérieure de
Commerce de Paris (ESCP), after a period in the
banking world, Edouard de Royère joined Air
Liquide in 1966. In 1967, he was appointed
Secretary General. In 1971, he joined its Board of
Directors and became, in succession, ViceChairman/Assistant General Manager in 1979,
Vice-Chairman in 1982 and then Chairman and
Chief Executive Officer from 1985 to 1995 and
Honorary Chairman in 1997.
Edouard de Royère is also a Director of Danone,
L’Oréal, Sodexho, Solvay, Fimalac, Wanadoo, a
member of the Supervisory Board of Michelin,
Chairman of ANSA and of the Fondation du
Patrimoine.
Jean-Pierre Verspieren
61, Vice-Chairman of Legrand S.A.
With a physical sciences degree and a diploma
from the Institut d’Etudes Politiques de Paris;
Report of the Board of Directors to the Annual Shareholders’ Meeting
103
Report of the Board of Directors to the Annual Shareholders’ Meeting
Jean-Pierre Verspieren joined Legrand in 1966 as
Assistant Secretary General. He was successively
to become Management Comptroller, Manager of
the Spanish subsidiary, Manager of the Isocéram
production entity, before becoming ViceChairman of Legrand S.A. in 1994.
Jean-Pierre Verspieren is also Chairman and
Director of different Legrand subsidiaries,
Chairman of the Limoges Commercial Court, ViceChairman of the Ecole Nationale d’Ingénieurs de
Limoges (ENSIL).
Raphaël Verspieren
58, Vice-Chairman of Legrand S.A.
With a diploma from the Ecole Supérieure de
Commerce de Rouen, Raphaël Verspieren joined
Group Legrand in 1967, where he held different
functions within the establishment or its subsidiaries. In 1994, he was appointed ViceChairman of Legrand. Raphaël Verspieren is also
Chairman and a Director of different Legrand subsidiaries.
Under the thirty-third resolution, it is proposed to set
the amount of the Directors’ fees granted to the
members of the Supervisory Board at € 640,000, it
being indicated that the amount concerning the
Directors’ fees for 2001 will be calculated pro rata
temporis.
Under the thirty-fourth and thirty-fifth resolutions,
it is proposed to give the Executive Board the different authorizations which your Board of
Directors holds to increase the capital, proceed with
employee stock holding transactions, grant subscription or stock purchase options to employees
and to the officers of the Company and its subsidiaries, increase the capital in the course of public offers targeting corporate stock, issue bonds,
proceed with corporate stock buy-backs and proceed with their transfer or cancellation.
And finally, under the thirty-sixth resolution, we
are asking you to grant us the powers required to
discharge the formalities concerned.
104
Auditors’ Report
on the issuing of
other investment securities
Extraordinary Shareholders’ Meeting
of June 11, 2001
Within the scope of our function as auditors
for your Company, and within the discharging
of the assignment provided for in the
Commercial Code and especially under
Articles L 225-135, L 228-92 and L 228-95,
we are introducing our report on the projected
issue of shares, share warrants or other investment securities opening access to the capital,
transactions upon which you are called to
decide (twelfth and thirteenth resolutions). It
will be possible to issue these investment securities within the limit of a nominal amount of
€ 1.5 billion. The maximum nominal amount
for the resulting increases in capital is limited
to € 750 million.
Your Board of Directors is proposing that you
entrust it with the definition of the terms concerning these transactions, and that in the thirteenth resolution you relinquish your preferential
subscription right.
We have examined the projected issue with every
due diligence that we have considered to be
required under the standards of our profession.
The amount of the price at issue of the stock securities to be issued not having being determined, we
are expressing no opinion on the final terms under
which these issues will be realised and, consequently, on the proposed cancellation of the preferential
subscription right, which you are asked to approve
in the thirteenth resolution, the principle of which,
however, is in line with the logic of the transactions
submitted for your approval.
In compliance with article 155-2 if the Decree
dated March 23, 1967, we will establish a further
report in the course of the realization of the issues
by your Board of Directors.
Neuilly-sur-Seine and Paris-la-Défense, April 5, 2001
The Auditors
Barbier Frinault et al.
Arthur Andersen
Aldo Cardoso
Pierre Jouanne
Befec-Price Waterhouse
Member of PricewaterhouseCoopers
Pascale Chastaing-Doblin
Daniel Chauveau
Report of the Board of Directors to the Annual and Extraordinary Shareholders’ Meeting
105
Résolutions
Resolutions
Resolutions
First resolution
(Approval of Financial Statements for fiscal year 2000).
The General Meeting, ruling under the quorum
and majority terms of Ordinary General Meetings,
having heard the reports of the Board of Directors
and the Auditors, approves the transactions and
accounts for the fiscal year 2000, as presented by
the Board of Directors, and takes due note of the
presentation of the consolidated financial statements for the year ending December 31, 2000.
Second resolution
(Appropriation for the legal reserve).
The General Meeting, ruling under the quorum
and majority terms of Ordinary General Meetings,
decides to charge the amount of 6,385,785.28
euros to the “merger premium” account for the
purpose of increasing the legal reserve to reach
10% of the new capital on December 31, 2000.
Third resolution
(Integration into premiums).
The General Meeting, ruling under the quorum
and majority terms of Ordinary General Meetings,
decides to assign 7,962,383.66 euros deposited by
Square D, in the course of the issuance of a
US$250 million loan convertible into Schneider
Electric SA stock in 2003, to ensure the guaranteed total payment of the nominal value of
Schneider Electric SA shares issued following
bond conversions.
It is consequently decided to pay a dividend of 1.6
euro per 8 euros share, creating a total earning of
2.4 euros with a 50% tax credit, and corresponding to the installment on the dividend paid on May
7, 2001.
Dividends paid out by Schneider Electric SA
under the heading of the three previous years and
the corresponding tax credits were the following:
1997
1998
1999
Dividend
net
fiscal
F
€
6.50
0.99
7.54
1.15
8.79
1.34
Tax
Credit
F
3.25
3.77
4.39
Total
Income
€
F
0.50
9.75
0.58
11.31
0.67
13.18
€
1.49
1.73
2.01
Fifth resolution
(Mr. Didier Pineau-Valencienne’s Directorship renewed).
The General Meeting, ruling under the quorum
and majority terms of Ordinary General Meetings,
renews
Mr.
Didier
Pineau-Valencienne’s
Directorship for a period of four years, to expire
at the Annual Shareholders' Meeting called in
2005 to decide on 2004 accounts.
Sixth resolution
(Mr. Jean-Rene Fourtou’s Directorship renewed).
The General Meeting, ruling under the quorum
and majority terms of Ordinary General Meetings,
renews Mr. Jean-Rene Fourtou’s Directorship for
a period of four years to expire at the Ordinary
Shareholders' Meeting called in 2005 to decide on
2004 accounts.
Seventh resolution
Fourth resolution
(Dr. Hans Friderichs’ Directorship renewed).
(Allocation of earnings and dividend pegged at 1.6
euros).
The General Meeting, ruling under the quorum
and majority terms of Ordinary General Meetings,
renews Mr. Dr. Hans Friderichs’ Directorship for
a period of four years to expire at the Ordinary
Shareholders' Meeting called in 2005 to decide on
2004 accounts.
The General Meeting, ruling under the quorum
and majority terns of Annual General Meetings,
approves the integrating into the carried forward
item of:
1. the non due share of the advance deduction
determined under the third resolution of the
Combined Ordinary and Extraordinary Meetings on
May 5, 2000; i.e.: 4,721,550.19 euros,
2. the non paid dividend relating to shares held by
the corporation, i.e., 7,951,316.12 euros, and
decides to pay out the balance of the earning which
amounts – given the amount carried forward
increased in this manner – to 542,622,870.41 euros,
in the following manner:
Dividend to shares
Advance deduction
Carried forward
106
€249,260,228.80
€61,610,598.41
€231,752,043.20
Eighth resolution
(Firming the Director’s fees).
The General Meeting ruling under the quorum
and majority terms of Annual General Meetings,
having taken due note of the Board of Directors'
report, decides to set the annual amount of the
attendance fees due to the members of the Board
of Directors at 640,000 euros.
Ninth resolution
(Covenants ruled under
Commercial Law).
Article
L
225-38
of
The General Meeting, ruling under the quorum
and majority terms of Annual General Meetings,
after having taken due note of the Auditors'
Special Report presented in compliance with the
instructions of Article L 225-40 of the
Commercial Law on covenants governed by
Article L 225-38 of the aforementioned Law, takes
due note of the information mentioned in this
report.
Tenth resolution
place at any time, including during an offer.
• In the case of financial transactions, the Board of
Directors can proceed to adjust to the maximum
and minimum number, and/or the selling price of
shares.
• The authorization is valid within the limit of an
18 month period.
(Authorization granted to the Corporation to
acquire its own stock:limit buying price 120 euros –
lower selling price limit 50 euros.)
Eleventh resolution
The General Meeting, ruling under the quorum
and majority terms of the Ordinary General
Meetings, having duly noted the Board of
Directors' report as well as the information memorandum prepared by the Company and approved
by the Commission des Opérations de Bourse
(Securities and Exchange Commission), authorizes
the Board of Directors in compliance with Article
L 225-209 in Commercial Law, with the purpose
of reducing dilution, to optimize the management
of Corporate Equity and to carry out external
growth transactions, or to stabilize the Stock
Exchange price, to acquire Corporate Stock.
• The acquisition of said stock can be carried out
by any means including acquiring blocks of stock
or using optional instruments on the market, off
the market and in the private sector.
• The limit number of shares that can be acquired
pursuant to this authorization is set at 10% of the
total number of shares that make up the registered
capital on the date at which the increase of capital is completed to remunerate Legrand shares
contributed within the framework of the Public
Exchange Offer for Legrand Corporation; i.e., a
maximum of 24,421,158 shares.
• As a result of the above limitations, the maximum
transaction amount cannot exceed 2,930,538,960
euros.
• The limit acquisition price is fixed at 120 euros,
the lower limit price for selling is 50 euros. If
however, the stock acquired in this manner was
used wholly or in part to grant stock purchase
options, under the dispositions of Article L225177 and according to Commercial Law, the selling price would then be determined in compliance
with legal dispositions relating to stock purchase
options.
• All or part of the stock acquired pursuant to this
resolution can either be sold or otherwise transferred, in particular by the exchanging of securities, selling in or out of the Stock Exchange, put
or call options, exercising vouchers or rights, or it
can be cancelled under the terms provided under
Articles L 225-204 and L 225-205 of Commercial
Law and in compliance with the fourteenth resolution of the Annual Shareholders' Meeting on
May 5, 2000.
• Acquisition or divestment transactions can take
The General Meeting, ruling under the quorum
and majority terms of Annual General Meetings,
authorizes the Board of Directors to proceed in its
own right with the creation and issuance of bonds
or similar securities (in particular subordinate or
refundable bonds, or for an unspecified period of
time), once or several times, in France or abroad,
within the limit of a nominal amount of 2.5 billion
euros, and quantified either in euros, in foreign
currencies, or in monetary units of whatever
nature established with reference to several currencies, with or without collateral or other security, under any proportions, or formats, and at any
time, rate or terms of issuance and amortizing
which said Board will consider to be appropriate.
The Meeting fully empowers the Board of
Directors for the fulfillment of this or these loans
and specifies that it will have every latitude to
determine the characteristics of said bonds or similar securities
This authorization is valid for a period of five
years from the day of this decision and substites
for any prior authorizations of comparable nature
within the limit of the unused amounts.
(Authorization for the issuance of bonds and related securities within the limit of 2.5 billion euros).
Twelfth resolution
(Authorization for the Board of Directors to
increase capital to a maximum nominal value of 750
million euros, while retaining the preferential subscription right, through the issuance of shares, with
or without stock subscribtion warrants, by the integration into the capital of earnings, reserves, share
premium capital and distributing free shares or by
raising the nominal value, and by the issuance of
equity warrants or other transferable securities
opening access to the capital. These securities may
be issued at a nominal value of 1.5 billion euros, or
at an equal value in other currencies or monetary
units).
The General Meeting, ruling under the quorum
and majority terms of Extraordinary General
Meetings, having taken note of the Board of
Directors’ report, and of the fifteenth resolution
adopted by the General Meeting of May 5, 2000
authorizing the Board of Directors to increase the
authorized capital by issuing securities or by giving
access to equity set aside for salaried employees
who have agreed to the Company Savings Plan, and
of the Auditors’ special report pursuant to the provisions of Article L 225-129 of Commercial law:
Resolutions
107
Resolutions
1) delegates to the Board of Directors the power
to increase the corporate capital, in one or several steps, up to a maximum nominal value of 750 million euros:
a) by issuing new shares, with or without subscription certificates, to be subscribed in cash or
by the offsetting of amounts due, with or without
share premium;
b) by incorporation into the equity earnings, of
reserves or share premiums and by distributing
shares or raising the nominal value of existing shares;
c) by issuing securities other than shares, compatible with standing legal provisions, directly or
indirectly giving right, through conversion,
exchanging, refunding, presenting title or in any
other manner, to the allocation of shares, at any
time or on set dates.
These securities may be issued in euros or any
other currency, or any monetary unit determined
by reference to a basket of currencies, up to an
aggregate nominal amount of 1.5 billion euros, or
the equivalent in other currencies or monetary
units determined by reference to a basket of currencies, as determined on the date of the decision
to issue the securities.
d) by issuing stock subscription certificates, to be
subscribed against cash, or allocated without cost,
it being specified that these certificates can be
issued alone or attached to the securities refered
to under c) above, and simultaneously issued;
e) by the simultaneous implementation of several
of these procedures.
2) Decides that owners of stock existing when the
shares and securities are issued against cash and certificates covered under § 1) a) and c) will, in an irreducible manner and in proportion with the number
of shares then held by themselves, enjoy a preferential right of subscription for said securities.
The delegation given under § 1) implies, for the
benefit of the owners of securities and vouchers,
the renunciation by the shareholders of their preferential stock subsciption rights which result from
the issuing of the aforementioned securities and
vouchers, immediately or in the long term.
The Board of Directors will determine, in the
course of each issue, the terms and limits within
which the shareholders will be able to exercize
their subscribtion rights on an irreducible basis, by
complying to the standing legal provisions. It can
establish, for the benefit of the shareholders, a
subscribtion right on a reducible basis which will
be exercized in proportion with their rights and
within the limit of their applications.
It can, if the subscriptions on an irreducible basis
(and, if necessary, on a reducible basis), have not
absorbed the total issue of shares, securities and
vouchers, either:
• Under the proper legal conditions, limit the
issuance of the amount of subscriptions collected;
108
• Or freely distribute the securities which have not
been subscribed on an irreducible basis and, as
the case may be, on a reducible basis;
• Or lastly, offer them to the public on the French
and/or international market, wholly or in part.
3) Decides that:
• To the amount of 750 million euros, determined
in paragraph 1) indent 1, will be added the
amount of additional new capital increases,
required to reserve the rights of the holders of
securities and vouchers giving entitlement, in
whatever manner, to the attribution of Corporate
stock, it being indicated that to this amount will
be charged the amount corresponding to the
shares issued directly or indirectly, under the
terms of the thirteenth resolution of this Meeting;
• That in the event of the integration of earnings,
reserves or share premiums, the amount of 750
million euros, decided under paragraph 1) indent
1 will be increased in order to represent, after the
incorporation, the same percentage of the corporate capital as was the case beforehand;
• That in the event where cost free shares are
handed out:
- those of the shares which will be allocated with
respect to old shares with double voting rights will
enjoy this right as of their issuance;
- those rights which appear in fractions will not be
negotiable and the corresponding shares will be
sold; every authority is given to the Board of
Directors to proceed with said sale under the
terms provided by standing legislative and regulatory provisions.
4) Grants full power to the Board of Directors, along
with the possibility of sub-delegating to its Chairman
under prevailing lawful conditions:
• To implement, in one or in several steps, the delegation given in paragraph 1) particularly with
the purpose of:
- determining the terms of the new capital increases and/or the issuance;
- determining the number of shares, certificates
and/or securities to be issued, their price at issue
as well as the amount of the premium the paying
up of which may be requested at the time of
issuance, as the case may be;
- determining the dates and modalities for the issue,
the nature and the type of securities to be created;
- determining the paying up mode for the issued
shares and/or securities;
- setting, as may be the case, the modalities for the
exercising of the rights attached to the securities
issued or to be issued and, in particular, to decide
the date (even retroactive) from which new shares
will bear interest, as well as all other conditions and
modalities for completion of the issuance;
- determining the methods under which the
Company will, as required, have the ability to buy
or exchange on the Stock Exchange, at any time
or during determined periods, the securities which
have been issued or are to be issued;
- anticipating the ability to eventually suspend the
exercising of such rights attached to said securities during a maximum period of three months;
- setting the modalities under which as the case
may be the protection of rights of titular olders of
securities which procure a right to corporate stock
on the medium term will be procured and, in compliance with legal and regulatory dispositions and
on its sole initiative, charge the costs of the capital increase(s) to the amount of premiums thereto related and collect from said amount the sums
which are required to raise the legal reserve up to
one tenth of the new capital, after each increase;
for any incorporation into the capital of premiums, reserved earnings or other:
- for any incorporation into the capital of premiums, reserved earnings or other:
• Determine the amount and nature of the sums to
be incorporated within the capital,
• Decide the number of shares to be issued or the
amount by which the nominal value of the shares
which make up the authorized capital will be
increased,
• Decide the date, even retroactively, from which
new shares will bear interest or the date from
which the rise in nominal will become effective,
• Decide, as the case may be and by derogation to
the provisions of Article L 225-149 in Commercial
Law, that the rights concerning fractional shares
will not be negotiable and the corresponding shares
will be sold, sums resulting from the sale being
allocated to the entitled holders of the rights at the
latest 30 days after the date of registration in their
account of the entire number of shares allocated;
• In a general manner, approve any convenant,
especially with the purpose of the proper completion of the anticipated issuance, take any required
steps and execute any formalities required for the
issuance and for the Financial Servicing of the
securities issued under the terms of this delegation, as well as for the exercising of rights attached
to same; note that each new capital issue is completed and perform out the correlative modifications of the Corporate Articles.
5) Decide that this delegation, which cancels and
replaces any prior comparable authorization of, is
valid for a period of twenty-six months effective
from this Meeting.
Thirteenth resolution
(Authorization given to the Board of Directors to
increase the capital for a maximum nominal value of
750 million euros, with cancellation of the preferential subscription right, through the issuance of shares,
with or without share subscription certificates, and
through the issuance of share purchase certificates or
other securities providing access to the capital. These
securities may be issued up to the level of a nominal
value of 1.5 billion euros, or its counter-value in every
currency or monetary unit. Priority rights may be
granted to the shareholders for issues on the French
market. This authorization is also valid for issues
floated by the subsidiaries where the Company holds
over 50%, and to remunerate securities which would
be contributed to the Company within the framework
of a take over bid for shares).
The General meeting, ruling under the quorum
and majority terms of extraordinary general meetings, having taken due note of the report of the
Board of Directors, of the fifteenth resolution
adopted by the general meeting on May 5, 2000,
authorizing the Board of Directors to increase the
corporate capital by the issuance of capital certificates or giving access to the capital set aside for
the employees having joined the Corporate
Savings Plans as well as of the special Auditors’
report, pursuant to the provisions of Article
L 225-129 under Commercial law as well as
Articles L 225-148, L 225-150 and L 228-93 of
the aforementioned law:
1) delegates to the Board of Directors the power
to increase, in one or several steps, the authorized
capital for a maximum nominal value of 750 million euros, it being specified that, out of this
amount, will be charged the amount of the shares
issued, directly or not, under the terms of the
twelfth resolution of this Meeting:
a) through the issuance of new shares, with or
without attached share certificates, to be subscribed against cash or by the netting of amounts
due, with or without an issue premium;
b) through the issuance of securities other than
shares, compatible with standing legal provisions,
giving right, directly or indirectly, by conversion,
exchange, refunding, presentation of a certificate or
in any other manner, to the allocation of shares, at
any point in time or on predeterminated dates.
Said securities can be issued either in euros or in
every other currency, or in monetary units established by reference to several currencies, within the
limit of a total nominal amount of 1.5 billion euros,
or its counter-value in other currencies or monetary units established by reference to several currencies, determined at the day of the decision to
proceed with their issuance;
c) through the issuance of share certificates, to be
subscribed against cash, it being specified that
these certificates can only be issued or attached to
securities referred to under b) hereabove;
d) through the commitant implementation of several of these procedures.
2) Decides to cancel the shareholder’s preferential
subscription right for the securities to be issued
under the terms of the delegation given under
paragraph 1) above.
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It is specified that the issues mentioned in paragraph 1) above can, as the case may be, be realized totally or partially on the international
market.
For the issues performed on the French market, the
Board of Directors can as the case may be give the
shareholders, under time limits and modalities which
it will determine, a priority period to subscribe the
shares, securities and subscription rights for shares
issued, without engaging in the creation of negotiable
and transferable rights. The shares, securities and
certificates which are not subscribed at the outcome
of the priority period will be dealt with through a sale
offer to the public.
The delegation given under paragraph 1) comprises,
for the benefit of the owners of the securities and of
the certificates, renunciation by the shareholders of
their preferential subscription rights for the shares to
which the issuance of the aforementioned securities
and certificates will give right, immediately or in the
long term. .
3) Decides that the sum belonging immediately or
in the long term to the Company, for each share,
security and certificate issued under the terms of
the delegation given under paragraph 1) above,
will of necessity be at least equal to the average of
the initial prices of the old shares of the Company
as noted during ten consecutive market days selected
from the twenty days previous to the beginning of
the issuance of the shares, securities and certificates; this average will, as the case may be, be corrected to take account of the difference in the date
of interest due; it is specified that the initial price
of the certificates issued alone will have, for each
share to be created, to be such that the sum of this
price and the exercizing price of each certificate is
at least equal to 105% of this average.
4) Grants full power to the Board of Directors, with
the possibility of subdelegation to its Chairman determined under standing law:
a) to implement, in one or several steps, the delegation given under paragraph 1) with in particular the purpose of:
- determining the terms of issue;
- determining the number of shares, certificates
and/or securities to be issued, their issue price as
well as the amount of the premium the paying up
of which may be requested from the moment of
the issuance as the case may be;
- determining the dates and modalities of the issue,
the nature and the form of the securities to be created;
- determining the paying up mode for the shares
and/or the securities issued;
- fixing, as the case may be, the modalities for the
exercising of the rights attached to the securities
issued or to be issued and, in particular, determining the date, even retroactively, from which the new
shares will bear interest, as well as all other terms
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and procedures for the realization of the issues;
- laying down the modalities under which the
Company will have, as the case may be, the ability
to buy or swap on the stock exchange, at any point
in time or during pre-determined periods, the certificates that have been (or are to be) issued;
- providing for the ability to discontinue, as the
case may be, the exercising of the rights attached
to these certificates during a time frame of three
months;
- deciding that the balance of the issue which may
not have been subscribed will be distributed at its
discretion, totally or in part, or that the amount of
the issue will be limited to the amount of the subscriptions received, it being specified that the Board
of Directors will be able to use, at its own discretion, all or only one of the above powers;
- at its sole initiative, charging the expenses of the
new issues of corporate capital to the amount of
the premium accounts related thereto and taking
from this amount the sums necessary to raise the
statutory reserves to one tenth of the new capital
after each increase;
- generally, passing all agreements, in particular to
successfully provide for the completion of operations considered, to take the required measures and
to carry out all formalities needed for the issuance
and the financial servicing of these certificates
issued under the terms of the present delegation
and also with the exercise of the rights thereto
attached; to note the realization of each new capital
issue and to carry out the correlative modifications
of the corporate articles;
b) in the event of the issuance of securities giving
a right to the allocation of shares upon the presentation of a certificate, to buy these bonds on the
stock exchange, in order to cancel them or not,
given standing legal dispositions;
c) to collect from the amount of the premiums related
to new capital issues the expenses covering these
transactions and the sums necessary to raise the
statutory reserves to one tenth of the new capital.
Moreover, the Meeting:
5) authorizes the Board of Directors within the
framework of the delegation which is the subject
of paragraph 1):
• In the case where one or several companies, in
which the Company would, directly or indirectly,
own more than half of the corporate capital,
would issue:
a) bonds with subscription certificates for Corporate
capital securities
b) other securities the form of which is compatible
with standing laws, opening the right by conversion,
exchange, refunding, presentation of a certificate or
any other manner, to the allocation, on fixed dates,
of corporate equity certificates for the Company;
• To proceed, in accordance with the issuing company, with the issuance of these bonds and other
securities as well as the issuance of certificates and
equity securities on the Company.
The General Meeting decides that paragraph 2),
indents 1 and 3, and paragraphs 3) and 4) of this
resolution are applicable to the authorization given
within this paragraph.
6) Authorizes the Board of Directors to make use,
totally or in part, within the framework of standing legal provisions, of the delegation given under
paragraph 1) above, to remunerate securities
which would be delivered to the Company within
the framework of a public stock offer concerning
certificates satisfying the terms determined under
Article L 225-148 of the Commercial law.
7) Decides that to the amount of 750 million
euros, determined under the paragraph 1) indent 1
will be added the amount of the additional new
capital issues, which resulted from the reserving of
the rights of the bearers of securities and certificates entitling the bearers in any manner, to the
allocation of corporate capital securities.
8) Decides that this delegation, which cancels and
replaces, (within the limit of amounts not used),
all former authorizations of comparable nature, is
valid for a duration of twenty-six months from the
date of this Meeting.
Fourteenth resolution
(Authorization given to the Board of Directors to use,
in the event of public offers or public stock offers on
Schneider Electric SA, authorizations to issue securities, giving access to the capital as granted by the
Meeting).
The General meeting, ruling under the quorum and
majority terms of extraordinary general meetings,
having taken due note of the report from the Board
of Directors, expressly grants the power to the Board
of Directors to use, fully or in part, within the framework of standing legal provisions, those authorizations given to the Board of Directors under the
twelfth and thirteenth resolutions adopted by the
present Meeting, should one or more public buy out
offers or exchange offers on the securities issued by
the Company take place.
This authorization is granted for a period which will
expire at the end of the Meeting which will decide
on the accounts for the fiscal year closing on
December 31, 2001.
Fifteenth resolution
(Adoption of the corporate denomination:
Schneider - Legrand, under suspensive conditions).
The General meeting ruling under the quorum and
majority terms for extraordinary general meetings
and after having taken due note of the report from
the Board of Directors and been advised of the
takeover bid for shares initiated by Schneider
Electric SA on Legrand shares, on January 15, 2001,
decides under the two following suspensive conditions, on the acquisition by Schneider Electric SA,
at the outcome of the public offer, of Legrand shares
put up for this offer, and on the authorization of the
aforementioned Schneider/Legrand merger from
the european Commission under ruling 4064/89 on
December 21, 1989 relating to concentrations
between firms, as notified on February 16, 2001:
- to adopt for the Company the following corporate name: Schneider - Legrand. This decision will
become effective on the date at which the
Company's management mode will change such as
it will intervene in accordance with the sixteenth
resolution adopted by this meeting.
However, for a transition period of one month as
of this date, the two names, the old and the new
name will be available for use by the Company.
- consequently, decides to modify as of the date
defined above, Article 3 of the Corporate Articles
which will be drafted as follows:
“Article 3 - Its corporate name is: Schneider Legrand”.
Sixteenth resolution
(Change in the Company's management mode: adoption of the form involving an Executive Board and
Supervisory Board, under suspensive conditions).
The General Meeting, ruling under the quorum
and majority terms of extraordinary general meetings and after taking due note of the report from
the Board of Directors and of the takeover bid for
shares launched by Schneider Electric SA on
Legrand stock on January 15, 2001 decides, subject to the two suspensive conditions, on the acquisition by Schneider Electric SA, at the outcome of
the public offer, of the Legrand stock brought forward to this offer, and of the authorization for the
aforementioned Schneider/Legrand merger by the
European Commission under ruling 4064/89 of
December 21, 1989 relating to mergers between
firms, as notified on February 16, 2001,
- to change the management mode of the
Company from its previous form and to adopt an
Executive Board and a Supervisory Board,
- to extend the corporate object to cover the activities of electrical equipment and ceramic and plastic products,
- to accordingly amend the Corporate Articles of
the Company, it being specified that this change
in the management mode and these statutory
modifications will take effect as of the meeting of
the majority of those persons designated to compose the Supervisory Board, which will intervene,
when convened by the Chairman of the Board,
within 45 days following the date on which the two
above conditions have been satisfied
Taking into account the number of amended articles
resulting from the change in the management mode
of the Company, the General Meeting decides to
reformat the Corporate Articles and adopts the new
text proposed, hereafter integrality provided in the
appendix to this resolution.
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The modifications to the Corporate Articles are in
italics
nected directly or indirectly, in any manner whatsoever, with the purpose stated above.
The Company may undertake all transactions
which are part of its purpose, either separately for
its own account or for the account of a third party,
or in partnership, or again by way of the purchase,
subscription, contributions or exchanges of corporate rights, partnering and purchasing of companies of every kind, whatever their form,
pursueing a similar or related purpose.
Corporate articles
Article 3
The Company moreover decides that this text will
allow the use of video transmission or remote
transmission means for taking part in the meetings
of the Supervisory Board or the returning of the
proxies or votes by mail for the General
Shareholders Meeting.
Appendix to the sixteenth resolution
The Company's name is: Schneider - Legrand
TITLE I - Nature - purpose - name - Duration and
head office of the Company
Article 1
The Corporation is of the limited liability type,
headed by an Executive Board and a Supervisory
Board. Created on December 2 and 4, 1871, it
continues to exist between the share holders composing its corporate capital, as indicated in Article
6 below, after merging with Schneider S.A Corp.,
which corporation had itself absorbed its own
industrial subsidiary floated on October 21 1836
in the form of a mixed liability stock corporation
and had converted into joint-stock company on
May 31, 1966, then taken back its name.
It is governed by standing regulatory and legal
provisions and these corporate articles.
Article 2
The Company has the following object, directly or
indirectly, in any form whatsoever, in France and
in all countries: the direct or indirect management,
by way of creation, acquisition or otherwise, of all
activities connected with electrical engineering,
electric distribution, industrial controls (electromechanical products), industrial engineering and
for the corporate world: (construction, building,
civil engineering, electrical enterprise, public
works...); all transactions relating to the production and the applications of energy in every form,
including the management of all connecting
industries, the granting or the acquisition of any
concession or the holding with lease or in participative control of all operations which are part of
the corporate purpose; the manufacturing, purchase, sale and commercial representation of electrical equipment and related components, ceramic and
plastic products, and of all materials or tools connected with the products listed above.
The application for, the purchasing, selling and
operating of patents relating to these industries.
Participation in any form whatsoever, in all enterprises or companies, under any form, dealing in
connection with the business of the Company or
of such nature as to support its industry and trade,
and, generally, all industrial, commercial and
financial transactions in stocks or real assets, con-
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Article 4
The duration of the Corporation, which was initially to come to term on January 1, 1887, was successively extended by decisions of the General
Shareholders Meetings on December 8, 1880,
December 17, 1887, December 19, 1896, October 29,
1908, and November 20, 1928, and up to July 1,
2031, save in the event of new extensions or early
winding up.
Article 5
The registered office is located at 92500 Rueil
Malmaison, 43-45 boulevard Franklin Roosevelt.
It may be transferred within the same
Departmental territory or within an adjacent territory by the Supervisory Board subject to ratification of said decision by the following Ordinary
General Meeting.
The Executive Board is entitled to establish, wherever it decides, offices, agencies and branches, and
to proceed with their discontinuation.
TITLE II - Corporate stock
Article 6
The corporate capital is pegged at 1 246 301 144
euros and is divided into 155 787 643 shares of
8 euros nominal value entirely paid up.
It was raised:
• To the amount of 6 364 233 100 FRF pursuant
to the decision of the Extraordinary General
Meeting of June 27, 1995 approving the merger of
the Company with Schneider SA through the
absorption of the latter and with the responsibility to remit to its shareholders 122 175 958 shares
each with a nominal value of FRF 50, in remuneration for their contribution;
• To the level of FRF 6 890 007 300 pursuant to
the decision of the Extraordinary General Meeting
of June 10, 1997 approving the merger of the
Company with Merlin Gerin and Telemecanique
by way of absorption of said latter corporations
with the responsibility to give to the shareholders
of Telemecanique 117 840 shares each with a
nominal value of FRF 50 in remuneration for their
contribution;
Article 7
The shares are registered or bearer shares, as the
shareholder prefers. Their ownership, whether they
are registered or bearer shares, results from the registration of their holders on stockholder lists, carried
out under the conditions and procedures laid down
under standing laws and regulations.
Any person or entity who would, within the meaning of Article L 233-9 of the Code of commerce,
(Commercial law), recently have become the direct
or indirect holder of a number of corporate shares or
voting rights equal to or higher than 0,5% of the total
number of shares or voting rights, or of a multiple of
this fraction, must, within five stock market-days as
of the overstepping of said threshold, advise the
Company by registered letter with acknowledgement
of delivery, of the total number of shares, voting
rights and securities giving in time access to the capital, which he or it owns, directly or indirectly. The
same obligations apply when the participation in
stock or voting rights drops below one of the above
stipulated thresholds. In the event of the non-observance of these obligations to advise, pursuant to the
present subparagraph, the shareholder, under the
conditions and limits defined by standing law, will be
deprived of the voting rights related with the shares
or the voting rights overstepping the advisory thresholds upon any request from one or several shareholders holding a fraction of the capital at least equal
to 2,5%, in the course of the meeting.
The Company may, under the conditions provided
under standing laws and regulations, request communication from any competent organization or
intermediate of any information relating to its
shareholders or owners of securities conferring voting rights immediately or in the long term, as well
as their identity and the number of shares which
they hold.
Article 8
The shares can be freely dealt in and transferred.
Article 9
Each share entitles its owner to partake in the
property of the corporate assets, the distribution
of the earnings and in any liquidation surplus, in
proportional with the number of existing shares,
taking into account, as the case may be, the amortized and not amortized capital, paid-up or not,
the nominal value of the shares and the rights pertaining to the different classes of shares.
All the shares which make up or will make up the
corporate capital will always be considered to be
similar relative to fiscal charges. Consequently, all
taxes and levies which, for any reason whatsoever,
could become due for some of them only, pursuant
to the refunding of the capital represented by said
shares, either during the existence of the Company,
or when it is liquidated, will be distributed between
all the shares constituting the capital at the time of
this or of these refunding procedure(s), so that all
the current or future shares will confer to their owners, with due account taken as the case may be of
the nominal and not amortized amount of the
shares and rights pertaining to the shares of different classes, the same effective advantages and will
entitle them to receive the same net amount
Whenever it is a requirement to own several shares
in order to exercise any given right, a single certificate or certificates in insufficient numbers relative to the number required do not grant any
rights to their owners as against the Corporation,
it will in this case inure the shareholders to bring
together the required number of shares.
Article 10
Amounts remaining to be paid up on shares
requiring paying up in cash are called by the
Executive Board.
The shareholders are advised of the proportions
called up and the dates upon which the corresponding sums must be paid, either by publication
fifteen full days at least in advance in a periodical
empowered to run legal ads, in the “Department”
of the registered office, or by registered letter
addressed to each shareholder within the same
time limits.
A shareholder who does not pay up for his shares
when payment is due will by right and without further notice owe the Corporation interest for late
payment calculated on a daily basis as of the due
date, at the legal rate of interest, without prejudice
to any forcible executory measures available under
standing law.
TITLE III - The Supervisory Board
Article 11 - Composition of the Supervisory Board
a) The Supervisory Board includes at least three
members and no more than eighteen members, who
are real persons. In the event of a merger, this number can be increased under terms provided by law.
Throughout his mandate, each member of the
Supervisory Board must own at least 250 shares.
b) The term of the office for members of the
Supervisory Board is four years, renewable. The
functions of a member of the Supervisory Board terminate at the conclusion of the ordinary general
shareholder meeting having ruled on the accounts of
the past fiscal year, and held in the course of the year
during which the mandate of the aforementioned
member of the Board of Trustees expires.
Should the Supervisory Board be totally renewed, the
mandate of one half of the designated members, rounded off where required at the smaller figure, would terminate at the end of two years and the mandates of the
remaining members, at the end of four years, the exiting order being determined by a draw performed during the meeting of the Board. This renewal in halves
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will not apply to the first Supervisory Board, whose
members shall have a four year mandate .
No Board Member mandate can be conferred to a person having reached the age of 70. When a mandate
is conferred to a person who will reach the age of 70
before the expiration of his mandate, the duration of
this mandate is restricted in any event, to the time
runnning from his or her nomination up to the ordinary general meeting deciding on the accounts of the
past fiscal year, and held during the year in the course
of which said member of the Supervisory Board
reaches the age of 70.
The ordinary general meeting, at the conclusion of which
the mandate of the member of the Supervisory Board
who has reached the age of 70 during the year is terminated in the normal manner or under the effect of the
previous indent, may as proposed by the Supervisory
Board, re-elect this member of the Board of Trustees for
only one further 4-year period , and one only.
The provisions of the two above indents are not applicable to the first mandate of persons designated to
compose the initial Supervisory Board. Their mandate may however not be renewed for a period extending beyond the ordinary general meeting which will
approve the accounts of the past fiscal year and held
in the course of the year during which they will reach
the age of 74.
The number of members of the Supervisory Board having gone beyond the age of seventy may not be higher
than one third of the members of said Supervisory Board.
Should this limit be overstepped, in the absence of the
voluntary resignation of any member of the old
Supervisory Board over the age of seventy, the oldest
of the members of the Supervisory Board would be
deemed to have officially resigned. However, should
the limit be exceeded as a result of the reduction in
the number of members of the Supervisory Board in
office, said excess would remain without effect if,
within a deadline of three months, the required substitutions were performed so that the number of members of the Supervisory Board in office having
exceeded the age limit may be maintained.
Article 12 - The Supervisory Board’s committee
The Supervisory Board elects among its members a
Chairman and a Vice-Chairman for a term which
cannot be longer than the term of their own mandate
as members of the Supervisory Board .
The Chairman has the duty of convening the Board
and of marshalling its discussions.
In the event of the Chairman’s inability to carry out
his mandate or whenever the Chairman has temporarily delegated his powers to the Vice-Chairman,
the Vice-Chairman will carry out the same functions
and will enjoy the same prerogatives.
The Board will designate a secretary who can be chosen from non members and who, along with the
Chairman and the Vice-Chairman, embodies the
committee.
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Article 13 - Powers and obligations of the
Supervisory Board
13.1 - The Supervisory Board exercises permanent
control over the management of the Company performed by the Directorate, by exercizing verifications
and inspection which it deems to be appropriate and
by obtaining the documents which it considers that it
needs to discharge its assignment.
13.2 - The Supervisory Board submits to the annual
ordinary general meeting its observations on the
Supervisory Board’s report as well as on the annual
accounts.
13.3 - a) In compliance with standing and legal and
regulatory provisions, the divestment of fixed assets,
the total or partial divestment of shareholdings, the
constitution of security, as well as of guarantees,
endorsments and security must be authorized by the
Supervisory Board
b) The Supervisory Board can, within the limit of a
total amount and of a specified amount which it determines for each transaction covered in a) of this paragraph 3, authorize the Directors to proceed with the
above mentioned transactions. When a transaction
exceeds the amount thus determined, authorization
from the Supervisory Board is needed in each case
13.4 - The Supervisory Board can designate, among
its membership, one or several expert committees, it
will detemine the composition and attributions of said
committee which will pursue its activity under its
responsibility. Each committee will report on its missions before the next meeting of the Supervisory
Board.
13.5 - The Supervisory Board adopts for his own proceedings an internal set of rules of which it will advise
the Directorate.
Article 14 - Meetings of the Supervisory Board
The Supervisory Board convenes as often as the interest of the Corporation requires and at least once every
quarter.
It is convened by the Chairman or the ViceChairman, by all means and even by word of mouth.
The Chairman must convene the Board on a date
within a limit of fifteen days, when the Board or at
least one third of the members of the Supervisory
Board introduces a motivated request for this purpose.
If the request remains without effect, its authors can
themselves convene the meeting by indicating the
Agenda of said meeting. If this is not the case, the
agenda is firmed by the Chairman and can only be
firmed at the time of the meeting.
Meetings are to be held in any place specified in the notification. The members of the Supervisory Board can take
part in these meetings through audio or video means.
Article 15 - Remuneration of the members of the
Supervisory Board
15.1 The members of the Supervisory Board are entitled to an annual fixed remuneration, as determined
by the ordinary general meeting, until a contrary decision. Its distribution in the form of attendance fees is
performed by the Supervisory Board, among its members, in the proportions it decides
15.2 Can also be allocated by the Board, any exceptional remunerations for missions or mandates
entrusted to its members, in such cases and under such
terms as are provided under standing law.
TITLE IV - Executive Board
Article 16 - Composition of the Executive Board
16.1 - Appointment
a) The company is managed by an Executive Board,
composed of two to seven members, who exercize their
functions under control of the Supervisory Board in
compliance with standing law and the statutory provisions hereafter exposed.
b) The Executive Board is appointed for one four year
term by the Supervisory Board which provides for the
replacement of its members in the event of vacancies,
in accordance with the law However, notwithstanding the present provisions, the first Executive Board
is appointed for one two-year term
c) No one over sixty eight can be appointed to the
Executive Board. Any member of the Executive
Board in office is deemed to have officially resigned
at the end of the corporate fiscal year during which
he reached this age. The members of the Executive
Board can always be reelected.
16.2 - Termination
Any member of the Executive Board can be terminated by the General Meeting, upon a proposition
from the Supervisory Board. If the termination is
decided without an appropriate reason, there may be
a case for damages.
Article 17 - Chairman of the Executive Board –
general manager
The Supervisory Board gives one of its members the
title of Chairman.
The Chairman of the Executive Board represents the
company in its relationship with third parties.
The Supervisory Board can grant the same power to represent the Corporation to one or several members of the
Executive Board who then bear the title of Vice Chairman
General, Executive Board Manager, Executive Board
General Manager, or General Manager
The functions of the Chairman and, as the case may
be the representative powers granted to a member of
the Executive Board can be withdrawn by the
Supervisory Board.
Article 18 - Powers and obligations of the
Executive Board
18.1 - The Executive Board receives the most extensive powers to act in all circumstances in the name of
the Company, within the limit of the corporate object,
and subject to those powers expressly allocated by law
to the shareholder meetings and to the Supervisory
Board. In its relations with third parties the Company
is committed even by the action of the Supervisory
Board which does not concern the corporate object,
unless it can prove that the third party was aware
that said action exceeded said object, or that it could
not be unaware of same given the circumstances, it
being excluded that the sole publication of the
Corporate articles is sufficient to constitute said evidence.
18.2 - The Board can entrust one or several of its
members or any person chosen among non members
with special missions, permanent or temporary, which
it determines, and can delegate unto them for one or
several determined purposes, (with or without the
power to subdelegate), such powers as are deemed necessary.
18.3 - When an operation requires the authorization
of the Supervisory Board, in accordance with the
provisions of Article 13 within these corporate articles, and when this Board refuses said authorization,
the Board will refer to the General Meeting which
then decides how the project should be dealt with.
The Executive Board presents once every quarter to
the Supervisor Board a written or oral report on the
advancement of Corporate business.
Article 19 -Deliberations of the Executive Board
The Executive Board convenes as often as the interest
of the Company requires, as called by its Chairman
or of at least by one half of its members, at such a
place as is indicated by the author of the notification.
The notifications are made in any manner and even
verbally. The agenda can be supplemented at the time
of the meeting.
The members of the Executive Board can take part
in the meetings of the Executive Board using audio
or video systems.
A member of the Executive Board can be represented
by another member in the Board meetings.
The Executive Board stops for its own operation,
following notice of the Supervisory Board, an internal set up rules.
Article 20 - Remuneration of the Board members
The Supervisory Board determines the mode and the
amount of the remuneration for each Board Member.
Article 21 - Covenants between the company and
a member of the Supervisory Board or Executive
Board
Any covenant intervening between the Company and
one of the members of the Executive Board or
Supervisory Board must be previously authorized by
the Supervisory Board.
The same goes for covenants in which one of the individuals covered in the previous subparagraph has an
indirect interest or through which he deals with the
Company through any intermediate.
Also subject to prior authorization, are those covenants
intervening between the Company and a firm, if one
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of the members of the Executive Board or supervisory
Board of the Corporation is a beneficial owner, an
associate with unlimited responsibility, a manager,
director, general manager or member of the Executive
Board of or Supervisory Board of said firm.
The above provisions are not applicable to covenants
relating to current transactions which are agreed
under normal conditions.
TITLE V - Auditors
Article 22
The General Meeting appoints regular and substitute auditors in compliance with standing laws.
TITLE VI - General shareholders meetings
Article 23
The General meetings convene and deliberate
under the terms determined by law
The meetings take place either in the registered
office, or in any other place specified in the notification.
The right to take part in - or to be represented at the General meetings, (Ordinary and also
Extraordinary), is subject:
- for the owners of registered shares, to their registration on the registered securities lists of the
Company;
- for the owners of bearer shares, at such places as
are indicated in the notification, to a certificate
established by the competent intermediary who
manages their securities accounts and noting the
unavailability of their shares up to the date of the
Meeting.
The time during which these formalities are to be
accomplished expires five full days prior to the
date of the Meeting, a period of time which the
Executive Board can always reduce, as it can
accept the deposits beyond the agreed time limits.
The shareholders can, under the conditions determined
by law and by the rules, address their proxies and votes
by mail for any General Meeting, either in paper form,
or,( on a decision by the Board indicated in the notification for the meeting), by fax or e-mail.
The Meetings are chaired by the Chairman of the
Supervisory Board or, in his absence, by the ViceChairman or by a member of the Supervisory Board specially designated for this purpose by the Board by
default, the Meeting elects its own President.
The teller functions are provided by the two present
and accepting members of the Meeting who hold the
greatest number of voting rights.
The Bureau appoints the secretary, which can be
selected among non shareholders.
An attendance sheet is to be held under the terms
provided by law
The copies or extracts of the official reports on the
Meeting are validated by the Board Chairman or by
a member of the Board or by the Secretary of the
Meeting.
116
Article 24
The Ordinary and Extraordinary General meetings, ruling under such conditions of quorum and
majority as are prescribed by the provisions which
respectively govern them, exercise the powers
granted unto them by law
The voting rights attached to the shares are in proportion to the capital which they represent, with
equal nominal value. Each share of the capital or
due interest entitles the holder to one vote, save if
imperative legal provisions are applied which limit
the number of votes available to a shareholder.
Notwithstanding the provisions of the preceding
indent:
- double voting rights are allocated to all entirely
paid-up shares for which evidence will be provided, at the end of the year preceding the date by
the Meeting, of personal registration since at least
two years, under the conditions provided under
standing law. Moreover, in the event of an
increase in the capital by capitalization of reserves,
earnings or issue premiums, double voting rights
are conferred, as of their issuance, to registered
shares allocated cost free against old shares to
which said right is attached.
- in a General Meeting, no shareholder can express,
personally or through agents, under the heading of
the single voting rights attached to the shares which
he holds directly and indirectly and to proxies
which he receives, over 10% of the total number of
voting rights attached to the corporate shares; however, if he directly or indirectly and/or as an agent
holds double voting rights, the limit thus determined may be raised by taking account exclusively
of the further resulting voting rights, subject to the
total of the voting rights which he expresses not
exceeding 15% of the total number of the voting
rights attached to the corporate shares.
For the application of the provisions above:
• the total number of the voting rights taken into
account is calculated on the date of the General
Meeting and is made available to the shareholders at
the opening of the aforementioned General Meeting;
• the number of voting rights held directly and indirectly is to be understood in particular as being
those which are attached to the shares that a shareholder holds on a purely personal basis, to the
shares which are held by a legal entity which he
controls within the meaning of Article L 233-3 of
the Commercial law and to comparable shares
assimilated with the shares owned, as defined
under the provisions of Articles L 233-7 to L 233-10
of the aforementioned Code.
• any shareholder proxy turned over to the company without any indication of an agent is subjected to the above limitations. However, these
limitations do not apply to the Chairman of the
Meeting voting under such proxies.
The limitations considered above become null and
void, without the requirement for a new decision
of the Extraordinary General Shareholders
Meeting, whenever a person or entity, alone or
jointly with one or more persons or entities, comes
to hold at least two thirds of the total number of
the shares of the Company, following a public
exchange offer or acquisition procedure applying
to the totality of the shares of the company. The
Executive Board notes the realization of the nullity
and proceeds with the correlative formalities to
modify the corporate articles
The limitations covered in the above paragraphs
are without effect for the calculation of the total
number of the voting rights, including the double
voting rights attached to the shares of the company and which must be taken into account for the
application of the legislative, regulatory or statutory provisions covering particular obligations by
reference to the number of existing voting rights
in the company or to the number of shares with
voting rights.
TITLE VII - Corporate accounts and approximation of
the results
Article 25
Each fiscal year lasts for one year starting on
January 1 and ending on December 31.
Article 26
The net proceeds of each fiscal year after deducting the overheads and other Corporate charges,
including all depreciations and charges, constitute
the net profit or loss for the fiscal year.
On the net income for each fiscal year, reduced if
required by the previous losses, a deduction of 5%
is first taken to constitute the legal reserve funds,
this deduction ceases to be compulsory when the
aforementioned fund has reached an amount
equal to one tenth of the Corporate capital; it is
again in force when, for an unspecified cause, the
“statutory reserve” has dropped below this fraction.
The distributable profit consisting of the income
for the year, reduced for previous losses and the
deductions mentioned above and increased by the
earnings carried forward, is at the disposal of the
General Meeting which, on a proposal from the
Executive Board can, in total or part, carry it forward again, assign it to general or special reserve
funds or pay it out to the shareholders in the form
of dividends. Moreover, the General Meeting can
decide the distribution of the amount collected
from the optional reserves, either to provide or to
supplement a dividend, or in the form of an exceptional distribution; in this case, the decision
expressly indicates the reserve items from which
the deductions are calculated.
The General Meeting has the power to grant to
each shareholder the possibility of choosing the
payment of the dividend in shares or scrip form
under the conditions and procedures provided by
law.
The contingency and amortization reserve funds,
as well as issuance and contribution premium,
can, whatever their initial appropriation, be given
any other destination and be in particular
employed to fund the statutory reserves or be used
for the amortization and the purchase of the
shares, or be distributed between the shareholders,
the whole schedule coming under the terms of a
decision from an Ordinary General Meeting.
TITLE VIII - Winding up - liquidation
Article 27
At the end of the Corporation or in the event of
an anticipated winding up, the General Meeting
will rule on the liquidation mode and will designate one or several liquidators whose powers it will
define and who will exercise their functions in
compliance with the law
TITLE IX - Disputes
Article 28
Any disputes which may arise during the existence
of the Company or in the course of its liquidation,
either between the shareholders, or between the
Company and the shareholders, concerning the
interpretation or execution of these Corporate
Articles or generally about corporate business, are
subject to the jurisdiction of competent courts at
the location of the registered office.
To this end, in the event of dispute, any shareholder involved must elect to reside within the
jurisdiction of a competent court at the location of
the registered office and all writs and notifications
will be regularly delivered to said residence.
In the absence of an elected domicile, the writs
and notifications will be validly delivered at the
office of the Public prosecutor at the High
Brankruptcy closest to the registered office.
Seventeenth resolution
(Cancellation of double voting rights).
The General meeting, ruling under the conditions
of quorum and majority of Extraordinary General
meetings, decides, as of the effective date of the
statutory amendments adopted by the sixteenth
resolution, to:
- replace the third subparagraph of Article 24 of the
Corporate Articles with the following provisions:
“By derogation to the provisions of the preceding
indent, in a General Meeting, no shareholder is
allowed to express, by himself or through an agent,
under the heading of the simple voting rights attached
to the shares which he holds directly and indirectly
Resolutions
117
Resolutions
and to the powers unto him given, more than 10% of
the total number of voting rights attached to all
Corporate share”
- remove from the last indent of this Article the indication: “,including the double voting rights”.
This decision is subject to approval by the special
meeting of the shareholders benefiting from double voting rights.
Eighteenth to thirty-second resolution
(These resolutions have the object of appointing, (subject
to the changing of the Company's management mode by
the adoption of a Board of Directors and a Supervisory
Board), as members of the Supervisory Board, further
the members of the Board of Directors of the Company,
- except for MM. Claude Bébéar, Jean-Paul Jacamon and
Henri Lachmann - Messrs Bernard Decoster, Edouard
de Royère, Jean-Pierre Verspieren and Raphaël
Verspieren).
Eighteenth resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an
Executive Board and of a Supervisory Board, in
compliance with the sixteenth resolution approved
by the present Meeting, to appoint, effective from
the date of said change of management mode, as
a member of the Supervisory Board, Mr. Daniel
Bouton for a term of 4 years, expiring at the end
of the General Meeting which will rule in 2005,
on the accounts of 2004.
Nineteenth resolution
The General meeting, ruling under the conditions of
quorum and majority of ordinary general meetings,
decides, subject to changing the Company's
management mode by the adoption of an Executive
Board and a Supervisory Board, in compliance with
the sixteenth resolution approved by the present
Meeting, to appoint, effective from the date of this
change of management mode, as a member of the
Supervisory Board, Mr. Thierry Breton for a term of
4 years, expiring at the end of the General meeting
which will rule in 2005, on the accounts of 2004.
Twentieth resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an
Executive Board and of a Supervisory Board, in
compliance with the sixteenth resolution approved
by the present Meeting, to appointe, effective
from the date of this change of management
mode, as member of the Supervisory Board, Mr.
Alain Burq Chairman of the Supervisory Board
118
of the Investment fund “Schneider Actionnariat”,
for a term of 4 years, expiring at the end of the
General meeting which will rule in 2005, on the
accounts of 2004.
Twenty-first resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general
meetings, decides, subject to changing the
Company's management mode by the adoption of
an Executive Board and of a Supervisory Board,
in compliance with the sixteenth resolution
approved by this Meeting, to appoint, effective
from the date of this change of management
mode, as member of a Supervisory Board, Mr.
Bernard Decoster for a term of 4 years, expiring
at the end of the General meeting which will rule
in 2005, on the accounts of 2004.
Twenty-second resolution
The General meeting, ruling under the conditions of
quorum and majority of ordinary general meetings,
decides, subject to changing the Company's management mode by the adoption of an Executive Board
and of a Supervisory Board, in compliance with the
sixteenth resolution approved by this Meeting, to
appoint, effective from the date of this change of
management mode, as a member of the Supervisory
Board, Mr. Jean-Rene Fourtou for a term of 4
years, expiring at the end of the General meeting
which will rule in 2005, on the accounts of 2004.
Twenty-third resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an
Executive Board and of a Supervisory Board, in
compliance with the sixteenth resolution approved
by the present Meeting, to appoint, effective from
the date of this change of management mode, as
a member of the Supervisory Board, M. Michel
François-Poncet for a term of 4 years, expiring
at the end of the General Meeting which will rule
in 2005, on the accounts of 2004.
Twenty-fourth resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of a
Directorate and of a Supervisory Board, in compliance with the sixteenth resolution approved by
this Meeting, to appoint, effective from the date
of this change of management mode, as a member
of the Supervisory Board, Dr. Hans Friderichs
for a term of 4 years, expiring at the end of the
General meeting which will rule in 2005, on the
accounts of 2004.
Twenty-fifth resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general
meetings, decides, subject to changing the
Company's management mode by the adoption of
an Executive Board and of a Supervisory Board,
in compliance with the sixteenth resolution
approved by this Meeting, to appoint, effective
from the date of this change of management
mode, as member of the Supervisory Board, Mr.
James Hardymon for a term of 4 years, expiring
at the end of the General meeting which will rule
in 2005, on the accounts of 2004.
Twenty-sixth resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an Executive
Board and of a Supervisory Board, in compliance
with the sixteenth resolution approved by this
Meeting, to appoint, effective from the date of this
change of management mode, as a member of the
Supervisory Board, Mr. Gérard de la Martinière
for a term of 4 years, expiring at the end of the
General meeting which will rule in 2005, on the
accounts of 2004.
Twenty-seventh resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an
Executive Board and of a Supervisory Board, in
compliance with the sixteenth resolution approved
by this Meeting, to appoint, effective from the
date of this change of management mode, as a
member of the Supervisory Board, Mr. Didier
Pineau-Valencienne for a term of 4 years, expiring at the end of the General meeting which will
rule in 2005, on the accounts of 2004.
Twenty-eighth resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an Executive
Board and of a Supervisory Board, in compliance
with the sixteenth resolution approved by this
Meeting, to appoint, effective from the date of this
change of management mode, as a member of the
Supervisory Board, Mr. James Ross for a term of
4 years, expiring at the end of the General meeting
which will rule in 2005, on the accounts of 2004.
Twenty-ninth resolution
The General meeting, ruling under the conditions of
quorum and majority of ordinary general meetings,
decides, subject to changing the Company's manage-
ment mode by the adoption of an Executive Board
and of a Supervisory Board, in compliance with the
sixteenth resolution approved by this Meeting, to
appoint, effective from the date of this change of
management mode, as a member of the Supervisory
Board, Mr. Edouard de Royère for a term of 4
years, expiring at the end of the General meeting
which will rule in 2005, on the accounts of 2004.
Thirtieth resolution
The General meeting, ruling under the conditions of quorum and majority of ordinary general meetings, decides, subject to changing the
Company's management mode by the adoption
of an Executive Board and of a Supervisory
Board, in compliance with the sixteenth resolution approved by this Meeting, to appoint, effective from the date of this change of management
mode, as a member of the Supervisory Board,
Mr. Piero Sierra for a term of 4 years, expiring
at the end of the General meeting which will rule
in 2005, on the accounts of 2004.
Thirty-first resolution
The General meeting, ruling under the conditions of
quorum and majority of ordinary general meetings,
decides, subject to changing the Company's management mode by the adoption of an Executive
Board and of a Supervisory Board, in compliance
with the sixteenth resolution approved by this
Meeting, to appoint, effective from the date of this
change of management mode, as a member of the
Supervisory Board, Mr. Jean-Pierre Verspieren
for a term of 4 years, expiring at the end of the
General meeting which will rule in 2005, on the
accounts of 2004.
Thirty-second resolution
The General meeting, ruling under the conditions
of quorum and majority of ordinary general
meetings, decides, subject to changing the
Company's management mode by the adoption of
an Executive Board and of a Supervisory Board, in
compliance with the sixteenth resolution approved
by this Meeting, to appoint, effective from the date
of this change of management mode, as a member
of the Supervisory Board, Mr. Raphaël
Verspieren for a term of 4 years, expiring at the
end of the General meeting which will rule in 2005,
on the accounts of 2004.
Thirty-third resolution
(Determining the amount of the attendance fees
allocated to the members of the Supervisory
Board).
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an Executive
Board and of a Supervisory Board, in compliance
Resolutions
119
Resolutions
with the sixteenth resolution approved by the present Meeting, to appoint, effective from the date of
this change of management mode, as a member of
the Supervisory Board, to set at 640, 000 euros the
annual amount of the attendance fees allocated to
the members of the Supervisory Board.
Thirty-fourth resolution
(Transfer of delegations to the Executive Board).
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an Executive
Board and of a Supervisory Board, in compliance
with the sixteenth resolution approved by the present Meeting, to confer on the Executive Board as
of the date of this change all of the powers available to the Board of Directors for the purpose of:
1) increasing the capital by the issuance of shares
or securities giving access to the capital with
upholding of the preferential subscription rights of
the shareholders, in compliance with the twelfth
resolution adopted by this Meeting,
2) increasing the capital by the issuance of shares
or securities giving access to the capital with discontinuation of the preferential subscription rights
of the shareholders, in compliance with the
thirteenth resolution adopted by this Meeting,
3) increasing the capital by the issuance of securities giving access to the capital, exclusively for
employees who have joined the firm's saving plan
(PEE), in compliance with the fifteenth resolution
adopted by the General Shareholders Meeting of
May 5, 2000,
4) allocating stock or purchasing options to the
management and wage earners of the Company
120
and of those companies which are related to it, in
compliance with the fourteenth resolution adopted by the General Meeting of May 6, 1999,
5) increasing the capital in the course of a public
offer concerning Corporate securities, in compliance with the fourteenth resolution adopted by
this Meeting,
6) proceeding with cancellations of shares held by
the Corporation, in compliance with the fourteenth
resolution adopted by the General Shareholders
Meeting of May 5, 2000.
Thirty-fifth resolution
(Transfer of delegations to the Executive Board).
The General meeting, ruling under the conditions
of quorum and majority of ordinary general meetings, decides, subject to changing the Company's
management mode by the adoption of an Executive
Board and a Supervisory Board, in compliance with
the sixteenth resolution adopted by this Meeting, to
confer on the Executive Board effective from the
date of this change all of the powers available to the
Board of Directors for the purpose of:
1°) issuing bonds or similar securities, in compliance with the eleventh resolution adopted by this
Meeting,
2°) proceeding with purchases of Corporate stock,
in compliance with the tenth resolution adopted
by this Meeting,
Thirty-sixth resolution
(Powers concerning formalities).
The General Meeting confers all powers to the
bearer of a copy or excerpts of the official minutes
containing these deliberations to carry out all legal
or administrative formalities.
Glossary
Architecture
The overall structure, logical components and logical interrelationships of a computer-based system, for example a network
connecting automation devices.
Building management systems
Software and automation devices to monitor and manage
lighting, HVAC, elevators, access control and other electrical
systems in a commercial or industrial building.
Busbar trunking
A power transmission and distribution system installed
in the ceilings or raised floors of commercial and industrial
buildings. In some applications, trunking can replace
power cables.
Capacitor
Device used to smooth out alternating current, providing pure,
battery-like direct current that improves the power factor
of electrical installations.
CASE
CASE (Computer-Aided Software Engineering) software
is used to design and develop other software,
such as applications for industrial automation devices.
Circuit breaker
A protective device that interrupts the flow of current
when the current exceeds a specified value (fire hazard)
or when defective insulation exposes bare wires (risk of fire
or electrocution).
Contactor
Electrical device used to control the flow of three-phase
electric power in a motor or other actuator.
Detector
Device used to acquire and transmit electrical
data concerning motion, position or the presence of devices
or products on a machine.
Distributor
Company that distributes, and sometimes generates,
electricity.
Ethernet
A high-performance local area network capable of supporting
the real-time data transmission needs of a workshop or plant.
Like any network, Ethernet systems use standard
communication protocols.
Extranet
The portion of a company’s intranet that is extended
to users outside the company, via a login and password,
but is not accessible to the general public.
Final distribution
Distribution of electricity in a building for domestic use,
in power sockets, for example, or lighting.
Harmonic filter
In an AC power system, harmonics are vol≤tage or current
signals that are not at the desired frequency and can therefore
be very harmful to electrical installations. Harmonic filters
use capacitors to screen out the frequency distortions and
protect equipment.
High voltage
Voltage levels higher than 40 kV.
Human-machine interface (HMI)
Components, such as pushbuttons, switches, lamps, monitors
and keyboards, that enable people to control a machine by
receiving or transmitting data from or to automation devices.
IEC standard
An international standard for electrical equipment issued by
the International Electrotechnical Commission.
Industrial automation devices
Devices that enable industrial machinery and processes to
operate without human intervention. Industrial control covers
functions such as data detection (sensors), processing
(relays, programmable logic controllers), actuator control
and protection (motor starters), human-machine interface
(control desks), communication (buses) and safety.
Industrial control
See industrial automation devices.
Inputs/outputs
Interface modules that enable sensors and pre-actuators
on production machinery to exchange data with the central
unit of a programmable logic controller.
Integrated optical sensor
A sensor that detects data through optical signals reflected
in fiber bundles. See sensor.
Kiosk
A prefabricated LV/MV transformer substation.
Low voltage
Voltage levels below 1,000V.
Low voltage switchgear
Protection and control devices for low voltage electrical
systems.
Medium voltage
Voltage levels between 1 and 40 kV.
Microgeneration
A power generation process that enables homes or small
businesses to produce their own electricity (usually low
voltage) to replace or supplement power from the utility
grid. Such installations tend to improve performance by
lowering costs and guaranteeing uninterrupted service.
Glossary
Modbus
Communication protocol that lets Schneider Electric automation components (or Modbus-compliant third-party devices)
exchange data with one another.
Safety components
Components designed to make a given machine, process
or application safe to operate by preventing harm to people,
plant and facilities.
Motor control and protection
See motor starter.
Schneider Global Business Development (SGBD)
The Schneider Electric organization that manages
large accounts worldwide.
Motor starter
Device that starts an electric motor and protects it during
operation. Depending on the type used, startup can be
“all-or-nothing”, soft or based on varying the drive’s speed.
Schneider Global OEM Development (SGOD)
The Schneider Electric organization that serves large
equipment manufacturers worldwide.
MV connection substation
See MV or HV substation.
Starter
See motor starter.
MV or HV substation
Substation that integrates switchgear such as circuit breakers
and contactors to supply a private electrical installation
with high and/or medium voltage electricity.
Static/Dynamic uninterruptible power supply
See uninterruptible power supply
MV or LV switchgear
Cabinet or enclosure housing electrical system protection
devices in a commercial or industrial building.
MVA
Megavoltampere. The unit of apparent power of an electrical
installation.
MV/LV transformer
Device that steps down medium voltage electricity into low
voltage current for supply to customers.
NEMA standard
A North American standard for electrical equipment issued
by the National Electrical Manufacturers Association.
Operator dialogue terminal
A human-machine interface component (see definition)
comprising a monitor and keyboard.
Original equipment manufacturer (OEM)
A company that uses product components from one
or more other companies to build equipment, machinery and
other products that it sells under its own name and brand.
Plug-and-play
Term describing electrical hardware can be easily installed
without any specific technical skills. Once installed
(“plugged in”), it can be immediately used (“played”).
Power distribution
Distribution of electricity from where it is generated
to where it is used.
Programmable logic controller (PLC)
A programmable device used to automate monitoring
and control of industrial plant, by receiving data from
sensors and transmitting orders to actuators.
Supervisor
A system of components and software that coordinates
and manages a production facility in order to supervise
and increase its productivity.
Switch
A device that opens or closes an electric circuit.
Systems integrator
A company that specializes in building complete automated
systems by putting together control components from
different vendors. Sometimes these systems also include
the related software.
TCP/IP protocol
The standard Ethernet protocol governing data interchange
between interconnected equipment within a given
communication architecture.
Uninterruptible power supply (UPS)
A back-up power system that supplies electricity if
an installation’s primary source fails. There are two types,
static UPSes that use a DC-to-AC inverter and dynamic
UPSes that use a motor generator set during normal
operation and on loss of normal power.
Variable speed drive
A power electronics device that starts a motor and varies its
speed in response to demand from an automation device.
Voice-Data-Image (VDI) network
A network capable of transmitting data in voice,
video or digital form.
Web automation
Internet-based technology adapted to industrial
automation systems.
Wireless
Any form of telecommunication in which electromagnetic
waves (rather than some form of wire) carry signals over
part or all of the communication path. Today, it is being used
to connect cellphones and other mobile devices to the
Internet.
This annual report has been published by
the Schneider Electric Corporate Communication Department
Tel.: +33 (0)1 41 29 70 76
Financial Communication
Tel.: +33 (0)1 41 29 70 42
Fax: +33 (0)1 41 29 71 42
Picture credits
Photographers: Patrice Tourenne, Véronique Vedrenne, Philippe Guignard
Agencies: REA : Ludovic Marin
Photo libraries: Gettyone Stone - PIX - Stock Market - Super Stock
Photo EURODIF - Schneider Electric photo library
Illustrations n.b. nota bene
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Printing: wprintel Editeur – Conseil à Paris
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